The old adage “never judge a book by its cover” has been applied to a wide variety of situations over the years, from encouraging open mindedness in social situations to shopping for a car to, well, judging books by their covers. And it turns out this piece of advice can be quite valuable for investors as well, especially those who have embraced ETFs as tools for building long-term portfolios or establishing short-term tactical tilts.
For investors who wish to take a longer look under the hood of a product, the transparency offered by ETFs allows them to do just that; most products publish a complete list of holdings on a nightly basis, allowing for a complete review of components that isn’t possible with mutual funds and various other types of securities. In most cases, the holdings of an ETF are fairly predictable; most investors could guess the primary components of the S&P 500 SPDR (SPY) or the Energy SPDR (XLE). [click to continue…]
Many investors point to the rise of the ETF industry as a clear shift in preferences away from relatively expensive active management in favor of low-cost indexing. It’s been said that the alpha hunters have evolved into beta grazers. But the benefits of the ETF structure aren’t reserved solely for passive cap-weighted products, and the [...]
Fidelity Investments announced today that it will offer its retail customers commission-free online trades for a suite of 25 iShares ETFs. The funds included in the commission-free platform include ETFs in all nine domestic equity style/size categories, as well as international equity and fixed income options. “Fidelity has partnered with the leading ETF provider in [...]
Charles Schwab, one of the world’s best known and largest asset management firms, recently took another step towards finally breaking into the rapidly-expanding ETF industry. Earlier this month, Schwab filed paperwork with the SEC to launch nine ETFs. The proposed funds will have the benefit of the Schwab name (and the tremendous resources that come [...]
Conventional wisdom says that while growth stocks outperform their value counterparts during recessions, value stocks gain the upper hand once the economy hits bottom, leading the way during the early recovery stage of most economic cycles. That’s according to a report by Russell Investments of Tacoma, Washington, which indicates that growth outperformance tends to reverse [...]
ETFs have enjoyed a tremendous surge in popularity in part because they allow investors to gain exposure to a broad (or narrow) market index in a timely and cost efficient manner. When implementing their investment strategy through construction of an ETF portfolio (or when using ETFs to round out a portfolio), investors have the option [...]
