Mutual Funds vs ETF's
Owning mutual funds can be expensive when you consider the 1.5% average charge for advisory fees that go to the broker or financial planner that helps you select the funds. Exchange traded funds (ETF) can be your answer to greater flexibility at a lower cost.
Bi-yearly, mutual funds are required to inform investors of their holdings. For the most part, mutual fund purchasers are not aware of what they own.
The S&P 500 Index EFT was the first Exchange Traded Fund. With one trade position, one could own the entire 500 companies of the S&P 500 with the street symbol SPY.
What makes ETFs unique is that they stay very close to their net asset value. The price of the ETF stock cannot drift too far above or below its actual value because professional traders will push it back in line quickly if they see disparity.
ETFs behave just like a stock. You can enact stops, limit order and view everything in real-time if you choose.
The expenses to own an ETF is negligible. For instance, fees for SPY (S&P 500 index ETF) are pegged at 0.09 percent.
When you own an ETF you know exactly what you have invested in. There is no surprise in regards to anything mysterious. There is complete transparency.
If there is a choice between mutual funds or ETFs, one should be aware of fund management past history and direction. How do they do in a bear market? How do they perform in a bull market? Do the beat the ETF for the same investment area? - 23212
Bi-yearly, mutual funds are required to inform investors of their holdings. For the most part, mutual fund purchasers are not aware of what they own.
The S&P 500 Index EFT was the first Exchange Traded Fund. With one trade position, one could own the entire 500 companies of the S&P 500 with the street symbol SPY.
What makes ETFs unique is that they stay very close to their net asset value. The price of the ETF stock cannot drift too far above or below its actual value because professional traders will push it back in line quickly if they see disparity.
ETFs behave just like a stock. You can enact stops, limit order and view everything in real-time if you choose.
The expenses to own an ETF is negligible. For instance, fees for SPY (S&P 500 index ETF) are pegged at 0.09 percent.
When you own an ETF you know exactly what you have invested in. There is no surprise in regards to anything mysterious. There is complete transparency.
If there is a choice between mutual funds or ETFs, one should be aware of fund management past history and direction. How do they do in a bear market? How do they perform in a bull market? Do the beat the ETF for the same investment area? - 23212
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posted by X - Men @ 3:06 AM
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