Financial Planning

My Approach for Investors

Exchange-Traded Funds (ETFs) were created and launched by innovative financial professionals who wanted an alternative to the high costs of traditional commissioned oriented mutual fund companies. ETFs are the fastest growing investment vehicle today.

They were introduced in 1993 and are now used as a powerful new approach to modern portfolio management. The popularity of ETFs continues to expand as they offer instant diversification in worldwide stock indices in sectors such as technology, health care, energy, basic materials and commodities.

An ETF is an investment that trades like a stock and can be bought and sold on global exchanges. ETFs represent portfolios of securities tracking specific indices. For example, if you wanted to own the top 100 largest NASDAQ stocks you would buy the Nasdaq 100 Tracking Index stock.  The Index includes 100 of the largest domestic and international non-financial companies listed on the Nasdaq Stock Market.

Nasdaq 100-Index (Top 10 Holdings – February 2009)

Some of the more common indexes are the Standard & Poor’s 500 Index (large US stocks), Dow DIAMONDS Trust (30 stocks in the Dow Jones Industrial Average), Russell 2000 (small-cap US companies), Vanguard Emerging Markets (companies located in emerging markets around the world)

The unique features ETFs provide are:

  • Diversification. ETFs track indices which are comprised of individual securities. This gives investors exposure to many different stocks and sectors and protects the portfolio from individual security risks.

  • Transparency. ETFs disclose on a daily basis the exact holdings of the fund so you always understand precisely what you own and how much you’re paying for your investments. This is not the case with a mutual fund.
  • Low Management Fees. Management fees charged by ETFs are in general lower than most mutual funds making ETFs more cost efficient.
  • Tax Efficiency. ETFs are generally more tax efficient than traditional mutual funds
  • Performance. Due to the low fees, over time ETFs often outperform actively managed mutual funds
  • Flexibility. ETFs are listed on exchanges which can be traded at any time the market is open

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  • Our Guidelines

    • ETFs have an average annual expense ratio of 0.17%, a minimal charge by the fund company to cover its costs of operation.
    • No insurance products, nor do we recommend them
    • No surrender charges
    • No upfront costs or load fees
    • No establishment charges
    • No 12b-1 fees
    • No commissions
    • No transfer fees