ETF + 401(k) = Fees

Exchange Traded Funds (ETFs) may now become popular in 401(k)s. My thought: bad idea. These retirement plans are usually funded by automatic investment, and in my case, every pay day would generate a transaction fee.

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Flexo, the owner and creator of Consumerism Commentary, has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow him on Twitter.

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Lkeyes

This would only be a problem if your 401(k) doesn't allow automatic investments to go into a money market fund. Then, on a quarterly or monthly basis you could take the money out of the money market fund and put into the ETFs.

ETFs are very much like sector mutual funds, but are indeed traded like stocks. They can be shorted. There is a lot about ETFs (as well as other excellent investment information) at www.aaii.com. Their latest monthly newsletter had an entire article about ETfs, with historical returns, etc.

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