Exchange traded funds have been around for quite some time. They are in essence, mutual funds that are traded like stocks. Unlike traditional funds that are traded by the end of the day close prices, ETFs can be priced and traded on whatever the value is in a minute-to-minute concept. One of the downsides of ETFs have been the commissions that are associated with them. Costs vary, but even in a discounted commission format, the costs can be prohibitive for the investment. So what is a no load ETF?
Since late in 2009, movement has been made by a number of investment companies to offer no load, or commission free, ETFs. It started in November, 2009 with one major investment company offering no load ETFs on some of their most popular classes. The trend has taken almost three months, but others are following in their footsteps. Each one offering or partnering with other companies that will offer an extra advantage for their no load ETF programs.
Some of the ETFs that are available include some on the S&P 500, along with Russell 1000 and 2000 as well as international stock index funds. Also thrown in are some bonds. The amount companies and the assets that are being included is an historic breakthrough. Many of these are the basic building blocks for any portfolio. The asset line up and the format of the a few companies seem to be designed around getting long term investors that have the cash, to open up the coffers. Other want to attract anyone and everyone.
Once the big investment companies have taken the plunge, it is only a matter of time for the rest to follow in line. It is the logical progression of competition. This is an immediate adrenalin kick to the investment arena. There have already been studies to show that more investment managers are leaning heavily toward ETFs and with the no load option they can make more investments without the commissions getting in the way.
In a time when the investment market has needed a jump start, the no load ETFs are the direction that everyone is looking. The array of investments gives the managers a full buffet of investment choices, without the need to focus on traditional or ETF. This also helps the DIY investor to make the best choices for their portfolios without the drag of the commissions to worry about.
The general outlook on the no load ETFs is that it can begin producing a larger volume of investors who are attracted by the fact that they can focus on the investment instead of the lack of margins due to commissions.
All in all, the no load ETFs have entered the playing field in a big way, and are already producing some fantastic numbers. From major teams to the little leagues, it looks like the no load ETFs are setting a whole new precedence. It has brought a new excitement to the game.
