Bookmark These: Examining exchange-traded funds
By Reid Kanaley
http://www.JewishWorldReview.com | (MCT) Exchange-traded funds are often described as mutual funds that can be traded throughout the market day. They're quite popular, but can get complicated. These sites help investors sort them out.
—The Economist: The starchy magazine recently sent up a warning signal on ETFs because many newer funds, labeled generally as "synthetic" funds, represent complicated derivative arrangements that not only befuddle investors but also could mask the risks of the investments they represent. http://is.gd/aOmwI2. Go here for an audio version of the same report: http://is.gd/ZrQdOr
—Don't be a fool: The plain-speaking Motley Fool investor-information site compares ETFs and mutual funds to help readers see what they're getting into. The description here starts with how the two types of funds are usually created, explains why ETFs have lower costs than most mutual funds, and notes a possibility — but not certainty — of tax savings for some ETF investors. This article is part of a collection on ETFs at the Fool site. http://is.gd/Tm3rTr
—Read the fine print: The site ETFguide.com, which claims a "vendor-neutral approach" to the subject, links to ETF prospectuses from major investment companies including Merrill Lynch & Co. Inc. and the Vanguard Group. A prospectus, as explained here, is a document "about the fund company, fund strategy, fund risks, fund expenses, performance history, miscellaneous charges," and other information that investors should digest before deciding whether to invest. http://is.gd/jYenkp
—Frequently asked questions: The National Association of U.S. Investment Companies has a site with investor guides on a wide range of subjects, including an FAQ on exchange-traded funds. The information is not the latest, but the basics on the background and function of ETFs hold up. http://is.gd/CSgBWF. The association's booklet on understanding ETFs is here in .pdf format: http://is.gd/DY3xjS
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