MutualFundWire.com: Forbes Cuts Through the Chatter on ETFs

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Wednesday, February 20, 2013

Forbes Cuts Through the Chatter on ETFs

What is the low-cost ETF fever all about? That's the question Rick Ferri sets out to answer in Forbes.

While listening to a speaker gush about the advantages during the 2013 Inside ETF conference last week, Ferri asks why it took so long for financial professionals to get into the product. After all ETFs are 20-years old.

His unabashed look at the product includes this frank assessment:

If indexing isn’t new, then what’s the ETF buzz about?

Sometimes things happen on Wall Street for the benefit of Wall Street — and the boom in ETFs is one of those things. Traders love the product because the number of common stocks listed on U.S. exchanges has dropped by half since 1997 and ETF trading is filling the gap. Brokers adore them because they’re able to conjure-up spicy ETF strategies to keep their clients interested. Fee-only advisers like them because they can point to lower costs and better returns without having to lower their own fee.