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ETF Specialist

Using ETFs to Piggyback Fund Managers' Broader Ideas

Cost-conscious investors can use ETFs to implement themes similar to those of smart, well-respected active mutual fund managers.

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U.S. equity markets have rebounded nicely from their mid-March dip. However, amid rising gasoline prices, fears of inflation, and increased global instability, equity investors have every right to be seriously concerned about the market going forward--and about what they are paying in order to invest in stocks.

Obviously, investors can buy a diversified basket of U.S. stocks either through an open-end mutual fund or through an exchange-traded fund. But with typical mutual fund expense ratios ranging from 1.2% to 1.7%--and even many institutional mutual fund expense ratios ranging from 0.5% to 0.8%--we like to highlight some ways that a cost-conscious investor can use ETFs to implement themes similar to those of smart, well-respected active mutual fund managers at a fraction of the cost.

Michael Rawson does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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