Mandy asks…
For long-term investors, which are better: mutual funds or ETF’s and why?
admin answers:
ETFs. Mutual funds have to distribute any capital gains or dividends to the investor each year. ETFs have no distributions.
Lizzie asks…
Which was the first brokerage firm to offer an ETF (exchange traded fund) to investors?
admin answers:
Try getting details at http://care4com.blogspot.com. They will get details for you at very low cost.
Mark asks…
Would you recommend ETF’s to long-term, young investors over mutual funds? Why or why not?
admin answers:
The only real difference that comes to mind is taxes. No taxes are due on ETFs until they are redeemed. I believe that capital gains taxes are due at that time.
Many mutual funds, on the other hand, have complicated tax structures that may involve paying a combination of ordinary taxes and capital gains taxes on the fund every year.
The point becomes moot if it is part of an IRA.
Carol asks…
Do you think ETf’s have now made mutual funds obsolete?
I find ETF‘s charges to be as low as the cheapest MF, are more convenient to buy and sell (no forms to fill) and much easier to figure out what the are investing in. Their name makes this perfectly clear.
Also there is no active manager to mess things up with his incompetence. The only thing MF do better is communicating with their investors. Grateful for your views.
admin answers:
Until some rules are changed, ETFs are slightly limited in their ability to give you the best investments in a ” sector”…ETFs are like “index” funds and must ( by law) invest in every aspect of the particular sector…whereas, a mutual fund manager can pick three or four of the top companies in the sector to be almost all of the funds holdings…makes a BIG difference.
…and the mutual fund manager can totally avoid the shakier companies in the sector!
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