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9 Comments
- BoneyB, on 10/12/2007, -0/+7I think it's hilarious people are starting actively-managed ETFs. The whole point of an ETF is to avoid mutual funds' exorbitant (and wasteful) management fees, to get a higher return after costs!
- cplusplus, on 10/12/2007, -0/+3Its great to see so many choices. Are there ETFs that hold things besides stocks?
- bibendum, on 10/12/2007, -0/+2There are ETFs that hold bonds (AGG, for example).
- rmqjr, on 10/12/2007, -0/+1ETFs have many advantages over regular funds. An index-tracking ETF is probably a better bet than many managed funds covering the same area because of the lower expenses and the historical fact that most funds have not done well when compared with indexes over similar areas. The price of an ETF is available at any moment, unlike the end-of-day pricing of traditional funds, so that one can get in or out immediately. Many ETFs can be shorted like a stock, while others function as the reverse of an index or a leveraged multiple of an index, and that can be handy if you want to short an index or a sector. Brokers also tend to be very flexible in offering ways to move money in and out of an account, something that can be awkward with many traditional funds.
- eliotmat, on 10/12/2007, -1/+2@BoneyB
The point of ETFs is to be able to get into and out of funds easily. They trade on exchanges just like shares of stock.
@cplusplus there are ETFs for gold, silver, and other commodoties.
Check http://www.etfconnect.com for good information about ETFs. They also have a nice little screener to help you find the one you want. - inactive, on 10/12/2007, -0/+0ETF's are great until the next correction or market collapse and then every shareholder will start litigation for n downside protection. If you want to retire rich buy value funds like Mutual Series 15% annualized return since 1949, and the best downside protection. In fact between 2000 and 2003 they returned 1.3% annualized while the market was down 15% annualized. ETF's are great for commodity's and some emerging markets although so are closed ended funds. But if you aren't on top of the financial markets you could lose your ass like many did in 2001
- ht70, on 10/12/2007, -0/+0@argoff
If they are backed by futures on gold, you won't have to worry about default. They NYMEX or ICE clearinghouses guarantee those future contracts. - argoff, on 10/12/2007, -0/+0Just a warning. Be very careful about gold and silver ETF's (and many mines). Some are legit and are backed by real gold and silver, but others are backed by gold futures, contractual promises, and other kinds of derivative contracts. The point is that the value of gold is in that it acts as an insurance and a money in the event of disaster like a bank collapse, or a panic out of the dollar in financial markets, or a collapse in the 370 trillion dollar with a T derivatives market. If one of these goes to hell, many gold ETF's will default and be worth toilet paper just at the moment when gold jumps to thousands of dollars per ounce. In fact with silver, there are more futures contracts than there is inventory creating a high probability of a silver panic. If that happens, all contracts are guaranteed to default in mass.
- CedEx, on 10/12/2007, -3/+0What's the difference between an actively managed ETF and a mutual fund then????
ETFs are great if you have a pile of cash at a given point and need a stable place to put it. It'd be extremely wasteful if you tried to buy ETFs on a regular basis like monthly purchases most people do with mutual funds.
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