Data coming in from several sources confirms it. There is a great deal of switching from mutual funds to ETFs in the portfolio management industry. And it’s happening right now.
Here is an analysis of the thinking behind the move that boils down to 3 points: actively traded mutual funds cost too much, under-perform, and inhibit asset allocation with their drift from style to style.
Move over, mutual funds: More financial advisers are using ETFs
More financial advisers are embracing exchange-traded funds and turning away from traditional mutual funds. If your investments are handled by a financial adviser, this major strategic shift could have big implications for your investment returns and risk, along with your tax bill.
“ETFs have provided opportunities to lower expenses, diversify portfolios more, and provide better returns with less risk,” says Tom Lydon, editor of ETF Trends.com, a Web site that tracks ETF developments.
ETFs are index funds that trade throughout the day, instead of being priced once daily like mutual funds.
Filed under: Costs of mutual funds, ETF News | Tagged: asset allocation, costs, etfs, mfsw, mutula funds, style drift
