Exchange-traded funds, which have been around for 20 years, are becoming a more popular retirement vehicle as more people are learning about them. Theyve been growing like crazy, says Vern Sumnicht, founder and CEO of iSectors, a Wisconsin-based outsourced investment firm. Theyre going to continue to grow. I dont know why it didnt happen years and years ago.
Low cost is one reason. Expense ratios for ETFs are substantially lower when compared to most mutual funds, says Corey Purkat, a retirement specialist with JA Counter. ETFs can also serve in a supplemental capacity. An ETF could round out a strong strategy thats being fulfilled with mutual funds or some other strategy, Purkat says. Typically, ETFs dont require a minimum investment and can be traded anytime during the day, two more benefits, he says.
