Shouldn’t investors just dump all their mutual funds and go with ETFs?
ETFs have grown steadily since the 2008 financial crisis. Investors find the exposure to baskets of stocks to be more attractive and slightly less risky than the exposure to individual shares.
The current record-length bull market has been quite challenging for active strategies.
Benz advises investors to consider these things before changing completely from ETFs to mutual funds:
- Taxable Account
- Appreciation of Holdings in a Taxable Account
- Heavy Stock Component in Taxable Portfolio
- Sizable Share of Traditional Stock Index Funds in Existing Portfolio
- Cost of ETFs Compared to Existing Funds in Current Portfolio
- Commissions to buy and sell ETFs
- Flexibility of Funds
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