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ETF + 401(k) = Fees

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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.

Published or updated October 26, 2005. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @flexo on Twitter and visit our Facebook page for more updates.

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Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He 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 Luke Landes on Twitter. View all articles by .

{ 1 comment }

avatar 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 http://www.aaii.com. Their latest monthly newsletter had an entire article about ETfs, with historical returns, etc.

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