ETF Radio Show

Ten Reasons ETFs Are Better Than Mutual Funds

Listen to The ETF Store Show every Saturday at 4pm on KCMO Talk Radio 710AM as we cover everything you need to know about Exchange Traded Funds and the world of investing.

On our most recent radio broadcast, to close out 2011, we discussed a recent article from etfdb.com titled “Ten Reasons ETFs Are Better than Mutual Funds”.  We covered quite a bit of ground on our radio show in the second half of 2011 and we thought this article did an excellent job of summarizing many of the key points we’ve continued to emphasize.

As we head into 2012, we would encourage all investors to think about these benefits in terms of their own portfolios and ask themselves if they’re taking advantage of these benefits.  If not, why?  If your advisor still has you invested in actively managed mutual funds, present them with this list and ask them to explain the reasoning.  Ask them if they get a kickback to put you in actively managed mutual funds.  You may not like what you hear.

Listen to the full show here.

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Fidelity to Offer ETFs?

A company known primarily for its actively managed mutual funds might finally be coming to grips with the fact that they can no longer just ignore the fast growing ETF space.  According to The Wall Street Journal, Fidelity Investments appears set to begin offering a broad array of ETFs after recently filing an application with the SEC.

As we explained way back in May of 2009, ETFs were “Eating Fidelity’s Lunch”.  Back then, it had already become clear that a primary reason for Fidelity’s deteriorating asset levels was the rapid growth of ETFs.  Fidelity was clearly concerned with entering a market that was an obvious competitor to their lucrative actively managed mutual fund business.  Remember, actively managed mutual funds charge significantly higher fees than ETFs (and more often than not, underperform the same benchmarks those ETFs are tracking).  Unfortunately for Fidelity, investors have continued to vote with their money and it looks as if Fidelity is finally realizing where the future of investing is heading.

As they say, better late than never…

Tax Loss Harvesting with ETFs and the Underperformance of Mutual Funds

Listen to The ETF Store Show every Saturday at 4pm on KCMO Talk Radio 710AM as we cover everything you need to know about Exchange Traded Funds and the world of investing.

On our most recent radio broadcast, we explained another timely, year-end topic – tax loss harvesting.  ETFs are an excellent investment tool to implement various strategies to take advantage of an area of the federal tax code that allows investors to use losses on investments to reduce their income and therefore, lower the amount they pay in taxes.  We explained several ways that investors can take advantage of ETFs to swap out of underperforming mutual funds or stocks and lower their tax bills at the same time.

Speaking of underperforming mutual funds, we also spent some time discussing a recent article on thestreet.com titled “13 Fund Managers Who Lost Among the Most Money”, which drove home the point on just how badly mutual funds are underperforming this year.  The article was full of statistics that should alarm even the most ardent mutual fund supporters including that 72% of the 261 large cap core mutual funds were underperforming their indices and a staggering 84% of large-cap growth mutual funds were underperforming.  And what’s worse for mutual fund investors is that they’re paying exorbitant fees for this underperformance.  It makes sense then, as the article pointed out, that Goldman Sachs predicts there will be $125 billion dollars in equity mutual fund redemptions, while ETFs will see $100 billion dollars in new purchases in 2012.  Why invest in expensive mutual funds that can’t deliver benchmark returns when you have low cost ETFs available that can?

Listen to the full show here.

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