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I’m young and new to the investing scene but I’m looking forward to getting involved. I want a no-load, low expense ratio mutual fund or an etf. I don’t really know too much about etf’s. If somebody wants to give me a simple explanation that would be great. Send me some links to some good mutual fund/etf companies too!
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6 Responses
jebediab
February 8th, 2010 at 5:12 pm
1Well…I can give you about half of what you asked for… a couple of emerging mkt ETFs are EEM ( globally invested) and EEB ( invested in Brazil, Russia,India and China)
… both have been consistent gainers.
As far as a mutual fund… FEMKX ( Fidelity’s emerging market fund) has been a good one for me… a ” double” in a little over three and a half years.
There are some differences between an ETF and a fund and depending on how you look at it, they can be ” benefits” or ” drawbacks”
An ETF is very, very fully invested in the area they cover, by design, by statute… so your returns are spread out over many good and not so good companies…a mutual fund is ” managed”…someone is there, picking the better companies and selling off poor performers…and they don’t HAVE to be invested in EVERYTHING in the sector..( that’s why there is a charge…but I never complain about paying 1.2% to make 37% in a year!!)
You must purchase a certain amount to enter a mutual fund… but an ETF you can buy in small increments if you want…so for the $ 2500. it might cost to buy a fund , you could have three or four different ETFs if you wanted…( if you go that way, you could get the EEM and the EEB and still look at other aspects of the economy…metals/mining? ( XME)…agricultural chems? ( MOO)
Wayyyy back in some of my answers is more info about the differences…if you don’t find an understandable explanation somewhere else, look there… but I’m sorry , I have to quit right now.
Good luck.
roderick
February 8th, 2010 at 5:42 pm
2Well, the most popular no-load, low expense mutual fund is probably the Vanguard Index 500. We have a significant portion of our long-term savings there.
An exchange-traded fund kind of aggregates a bunch of stocks, and you can buy or sell the ETF shares on the open market just like an ordinary stock. If you put your money in the Vanguard (or Fidelity, or any of thousands of mutual funds), you have to go to the company directly to purchase or redeem your shares.
An example of an ETF is the symbol “TAN” which invests in a handful of solar companies. You can google “quote TAN” to look at it. I’m not saying whether this particular fund is a good investment or not, just using it as an example. Do your own research.
TaxConsultonline .com
February 8th, 2010 at 7:17 pm
3There is certain Tax differences in how – ETFs and some Mutual Funds are charged over a 7 to 8 year period, So it i might differ alittle in where the Fund or Index ETFs are domiciled, managed etc.
And what country you are living, Even though Emerging markets have performed well in the last few years, don’t be at all surprised if they have a bad 1 or 2 years performance soon ?
So some diversifying is a good idea.http://www.etfinvestor.info
bunnycon
February 8th, 2010 at 7:46 pm
4ETF stands for exchange traded fund. It is a fund that trades like a stock does. Most ETF’s track indexes and they do so very inexpensively. I personally feel you get more from a good index mutual fund and can find some with very low fees (Vanguard, Fidelity to name two fund companies.) You should post on our site, free http://www.moneyrec.com. You should list your age, amount of money, financial situation, goals, etc. in order to get a comprehensive answer with some value.
Best of Luck,
Bunny
ac
February 8th, 2010 at 11:00 pm
5ishares
http://www.ishares.com/home.htm
jlf
February 8th, 2010 at 11:49 pm
6Use the screener tools at Morningstar.com.
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