Picking The Diamonds Out of The ETF Rough

This article was written by David Trainer, CEO of New Constructs. Having too many choices can be intimidating for many investors and there are definitely lots of choices when it comes to ETFs. For example, in the equity market alone, there are 30+ technology sector ETFs, or 35 ‘large cap value’ and 20 financial ETFs. A very healthy selection abounds for every category of ETF. The problem is that these ETFs are not made the same even though they may be in the same category. There are major differences in methodologies between funds, which results in drastically different holdings even within a given sector. Consider the chart below (figure 1) which compares all of the ETFs in the Technology Equities ETFdb Category and the number of holdings within each fund: Figure 1: Tech ETFs and Holdings TICKER ETF Description # of Holdings* PSI PowerShares Dynamic Semiconductors 29 PSJ PowerShares Dynamic [...] Click here to read the original article on ETFdb.com. Related Posts: SPDR Attack: State Street Rolls Out More Sector ETFs Tech ETFs In Focus: Highlighting Some Hyper-Targeted Options Semiconductor ETFs Soar On Intel’s Bullish Outlook Ten ETFs To Own If (When) The Fed Raises Rates Google Earnings Put Tech ETFs In Focus