By Kelly Doria, Director of Public Relations and Guest Blogger
USA Today called them the best investment that people don’t understand. They reached $1 trillion in assets at the end of 2010, and some analysts predict that their assets will continue to grow at more than 20 percent a year.
I’m talking about exchange-traded funds, or ETFs, and today Scottrade, through its affiliate company, FocusShares (both are owned by the same parent company, Scottrade Financial Services, Inc.), launched 15 new ETFs that have among the lowest expense ratios in the market today and are available to Scottrade customers who trade online for free. Yes, free.
FocusTM Morningstar ETFs began trading today on NYSE Arca (an exchange where the majority of ETFs trade) and anyone – Scottrade customer or not – can now buy or sell them at any time (but only Scottrade customers and advisors using Scottrade® Advisor Services can trade them without paying a commission).
Here are some quick basics about ETFs:
- ETFs are similar to mutual funds, but trade throughout the day on an exchange like a stock. (While mutual fund transactions only occur at the close of the market, ETFs trade all day long.)
- ETFs generally have lower expense ratios than other investment products because they are based on an index and are not actively managed, and the less you pay in expenses, the more you can invest.
- ETFs come in handy when investors want to create a diverse portfolio, because you can buy a basket of securities representing all or part of the market in a single transaction.
So, today is a big day at Scottrade. We have been in business for 31 years, and our Founder and CEO, Rodger Riney, has been committed to providing investors with value and support from the beginning, so these products are right up his alley. In fact, I heard him say just last week that he loves giving our customers a deal and offering FocusTM Morningstar ETFs for free with expense ratios that are among the lowest in the industry is a great deal.
You can learn more about ETFs in Scottrade’s Knowledge Center or about FocusTM Morningstar ETFs by going to www.focusshares.com. Do you invest in ETFs?
Kelly has been with Scottrade since 2002 and currently serves as the Director of Public Relations.