Best and Worst ETFs (In Terms of Value)
Tuesday, May 4th, 2010Clemens Kownatzki submits:
The widely held belief that Mutual Funds would provide diversification and a chance to outperform the markets has been a central theme leading to the growth of the Mutual Fund industry in previous decades. Opponents of Mutual Funds including Vanguard founder John Bogle pointed out that in fact the vast majority of mutual fund managers were not outperforming the benchmark index, the S&P 500. That led to the concept of indexing which provided investors with a low-cost alternative to the higher priced Mutual Funds.
The first Exchange Traded Fund, SPY and many of the Vanguard Index funds still hold to the same belief that investors are better off investing in a low cost index fund which should, over time, match general market returns as near as possible. Those traditional index funds still do so at very low costs compared with the typical Mutual Fund charging fees of 1% and above.
