vinyl siding installation siding calculator schaumburg best siding kildeer hardie board siding round lake heights hardie board siding johnsburg .. Chicago Drug testing

No Load Mutual Funds or Exchange Traded Funds (ETFs)?

If you are fed up with early redemption charges and ever increasing mutual fund management fees on top of bad-performing fund managers, read on. There is a quiet revolution going on in the no-load mutual fund industry and you, the individual investor, may benefit from it greatly.

I am referring to Exchange Traded Funds (ETFs), which have been around for years, but have grown tremendously since their inception. There are currently over 100 choices with around $10 billion in assets.

In a nutshell, an ETF is a specific kind of no-load mutual fund that you might consider to be a basket of stocks. ETFs are diversified like mutual funds, only they trade like stocks. They are cheap to trade (as low as $8.00) and don't hit you with any short-term redemption fees. And they offer investing opportunities across the board.

ETFs track every index under the sun including the S&P 500, the Nasdaq 100, The Russell 2000 and many others. Available through any discount broker, they basically fall into one of three categories: broad-based U.S. indexes, sectors and international.

The have esoteric names such as iShares, StreetTracks, HOLDRs and SPYDRs. The difference is in the index they are tracking and the company marketing them. You will see big name companies offering them, like the American Stock Exchange, Barclay's Global Investors, Vanguard, and State Street Global Investors.

In my newsletter I track the currently most appropriate ETFs for you to consider. For more detailed information you can visit these web sites:



  • http://www

In addition to inexpensive trades and no short-term redemption fees, how else can ETFs save you money vs. no load mutual funds? One way is on their annual management fees. That fee for ETFs is in the area of 0.45% vs. 1.5% on average for no load mutual funds. The fees charged by discount broker are so low they almost can be disregarded, usually less than 0.1% of the transaction.

For example, I have used ETFs for some managed account clients during my last Buy cycle, which started on 4/29/03, and paid $27 for a $28,000 order - and that wasn't even with the cheapest discount broker.

So, if these ETFs are so great, why hasn't your broker or financial planner recommended them to you? Simple! Brokers, and those advisors working on commissions, don't make money on ETFs; no commissions up front or hidden on the back end. It's simply not in their interest to promote them.

With all the positives for the investor, there is one disadvantage, which may not be applicable to you unless you are a hot shot no load mutual fund picker. It is that in any given economic environment really super performing mutual funds can outperform the indexes, but an ETF can never outperform the index it's tied to. You would need to look at your own investment record to know whether this is a downside for you.

Here's a real life example from my advisory practice. My trend tracking indicator signaled a Buy on 4/29/03. Based on my momentum indicators I chose 5 no load mutual funds and 4 ETFs. Over the following 3 months my ETFs gained anywhere from +10.02% to +22.36%, while my no load mutual funds gained from +9.15% to +36.35%. If you're fortunate enough to make a superior selection you will outperform an ETF. Of course, that presumes you picked a very successful fund as compared to only a moderately successful ETF.

A word of caution! Just because ETFs are cheap and easy to buy doesn't mean they will guarantee you a profit. You can lose money with them just as easily as you do with no-load mutual funds. You still need to make sure you have a disciplined methodology in place to help you get into and out of the market. If you don't, you're gambling no matter what you invest in.

Having gotten the disclaimer out of the way, hopefully these insights into ETFs will broaden your perspective on ways you can prosper in your investments.

? Ulli G. Niemann

About The Author

Ulli Niemann is an investment advisor and has been writing about objective, methodical approaches to investing for over 10 years. He eluded the bear market of 2000 and has helped countless people make better investment decisions. To find out more about his approach and his FREE Newsletter, please visit:;

In The News:

Different Types of Mutual Funds

This is a guide to the different types of mutual... Read More

Red, Green, Yellow - or - Stop, Go, Go Very Fast: Which Describes Your Online Trading?

Ever notice how behavior in one area of life can... Read More

Kick The Tires

Before you buy another car you walk around the lot,... Read More


I continually hear from economists, talking heads, other market letter... Read More

The Cub; II

We keep hearing about this bear market and that the... Read More

Money, Insanity and Wall Street

Money: the most charged word in the planet. It means... Read More

Investing in Trash Company Stocks

Refuse is a serious issue in any society, about as... Read More

How (NOT) to Buy Mutual Funds

When it comes to mutual funds, there is a lot... Read More

Do You Know What is the Single MOST Critical Mistake in Trading the Stock Market??

Well maybe that's overstating it a little, but it's certainly... Read More

Choosing An Investment Stock Broker

If you want one.And I don't recommend any broker with... Read More

Why This Bear?

People are constantly asking me why is the stock market... Read More

Trading vs Investing

I often hear from people, "I don't trade. I invest.... Read More

Buying Stocks and the Importance of Correct Timing

An investor can find and research the best stock on... Read More

Frog In The Pot

You remember the story about the frog that was put... Read More

Online Investing & Online Stock & Share Trading: Difficulty in Taking Stop Losses in the Market

This is an extract of an article which was first... Read More

Shadow Bull

As one of my regular readers you know I have... Read More

A Penny for Your Stocks

According to Investopedia Inc. the penny stock market has seen... Read More

Historical Briefing: Stocks, Finance and Money

The World Bank claims that some two billion of the... Read More

Investment Attorneys and Garbage Stocks

How is it possible that trash Companies are posting less... Read More

Stock Investment Advice

Stock investment advice is easy to find. Do you get... Read More

Peer Groups

Whenever I see mutual fund comparisons in the trade publications... Read More

Dont Spend Another Dollar on Business Opportunities Until You Read This

With an insecure job market, overworked employees, insufficient retirement savings... Read More

You Don?t HAVE To Be Trading

As a novice trader, you'll often feel the need to... Read More

Series 7 Exam

What is the Series 7 Exam? If you... Read More

The Stock Market - How Just One Question Will Tell You All You Need To Know About Your Stock Broker

Last time we looked at the real performance of the... Read More

everlast induction lighting high power led street light Pete's produce ..
everlast induction lighting high power led street light Pete's produce ..