How Risky are ETFs?

The August 24 “flash crash” has some industry experts questioning the safety of ETFs, according to a Wall Street Journal article. ETFs, or exchange-traded funds, offer investors the diversification of a closed-end mutual fund but differ in that they trade on exchanges all day like stocks. Beyond offering the ability to trade like stocks, ETFs…

 

Beware of Paying Active Management Fees to a Passive Manager

Indexed mutual funds (passively managed funds) aim to track an index or some segment of the market with low fees. Anyone who has heard of John Bogle knows that runaway fees can eat into your portfolio performance over the long run. However, a recent post at AlphaBetaWorks Insights warns of “closet indexing”: the practice of charging active…

 

Schwab Lowers Minimum Initial Investment on Mutual Fund OneSource Platform

Charles Schwab has lowered the minimum initial investment for most mutual funds on its zero-transaction-fee Mutual Fund OneSource platform to $100, dropping the minimum for subsequent investments to $1. Previously, initial investment minimums were set at $2,500, with subsequent minimums set at $500. According to Schwab, it now offers the largest selection of funds available at…

 

Market Volatility Disrupts Fund Pricing

The historic volatility the markets saw at end of August not only rattled investors, it proved to be too much for the software used to price a number of funds and ETFs provided by some of the Wall Street’s biggest firms. In a Wall Street Journal article, author Leslie Josephs outlines how a “software glitch”…