Kiplinger explains, “with total assets approaching $1 trillion, ETFs are quite the popular investment these days -- and for good reasons. They have several advantages over traditional mutual funds, although they also have a few drawbacks."
Historically, ETFs are designed to track an index, like the S&P 500. They are passively managed: when the index makes a trade, the ETF makes the same trade without speculation. Operational efficiency, transparency, liquidity and tax efficiency are some of the numerous advantages to ETFs.
AdvisorShares Investments, LLC is one of the first of three firms to obtain SEC exemptive relief, allowing them to marry the positive features of ETFs with professional money management.
This week, the company filed with the SEC to launch a fund of funds style ETF investing in both long and short positions.
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