Exchange Traded Funds

Exchange Traded Funds (ETFs) are some of the fastest-growing investment vehicles in the financial markets today. Like index funds, ETFs are portfolios of stocks or bonds that track a specific market index. Like stocks, ETFs can be bought and sold, long or short, on an exchange throughout the trading day. In 2004, US assets in ETFs grew 50% – from around $150 billion to over $225 billion by year end as investor demand for trading flexibility, transparency and cost-efficiency increased.

Now you can implement a targeted asset allocation strategy or fine-tune a tactical one while partaking in the diversification offered by index funds.

Common Uses of Exchanged Traded Funds

  • Diversification
  • Portfolio Completion
  • Sector rotation
  • Tax loss harvesting
  • Cash equitization
  • Duration/credit adjustment
  • Hedging

Benefits of Exchange Traded Funds

  • Diversified Index Portfolios. ETFs provide exposure to a broad range of global capital market indices, making them an ideal vehicle for constructing asset allocation portfolios.
  • Effective Tax Management. Investors in ETFs control their own individual cost basis, which can provide a more effective means to manage tax liability than investing in mutual funds.
  • Low Expenses. Because of their unique structure, ETFs generally offer lower internal expense ratios than comparable index mutual funds.