Exchange Traded Funds, Fees and Expenses

By |2015-05-22T17:44:01+00:00October 7th, 2013|Retirement Planning|

One thing for sure about the security markets is the simple fact they live on fees. The enormous popularity of Exchange Traded Funds (ETF) has certainly drawn the attention of those who put the fees in place. A recent article in Forbes (http://www.forbes.com/sites/rickferri/2013/09/02/etf-fees-creep-higher) noted that fees have been creeping up since their inception.

Most investors are unaware of the fees being charged to their account prior to any crediting or losses. According to Forbes, the average annual fee for owning an ETF is .61%, not bad really when you compare them to mutual funds.

In case you didn’t know, exchange traded funds (ETF) are different from mutual funds in one major way, they can be traded during the open hours of the stock market where mutual funds are traded only after the market has closed. Also if you buy or sell an ETF you will be charged a sales commission (in most cases).

Like all securities, buying an ETF can expose you to both risk and reward. If you are an active trader the use of an ETF can be of great advantage because decisions are never delayed, they can be bought and sold immediately.

ETFs have a spot in our investing portfolio but make sure you fully understand the fee structure as an owner and when you decide to buy or sell.

If you are trying to move away from fees and risk, a Multi-Year Guaranteed Annuity could fit the bill. Time periods can vary, generally as low as 2 years and as long as 5 years. Most smart investors use both the safety and the risk approach to investing.

About the Author:

Bill Broich
Bill Broich is a well-known annuity expert with over 30 years of experience. He has written hundreds of articles on annuities and other financial topics, and has been a featured commentator on TV, Radio and the Internet. To follow Bill's profile, click here.