In October, CLS Investments, an ETF strategist, noticed an anonymous trader following their models and the trades they made in them. Here’s the firm’s response.
Dear Copycat Trader,
Most advisors understand best trading practices and get help from an ETF strategist to ensure they’re doing right by their clients. However, we can’t quite figure you out. We know you have been following our ETF models and the trades we make in them. We’re assuming it’s because you didn’t want to pay an ETF strategist fee. We, in fact, offer models with multiple strategists and no strategist fee. In addition, there are a number of reasons to allow professional traders handle ETF orders in particular.
We’d like to take this opportunity to fill you in on some ETF trading best practices. ETFs are innovative investment vehicles that provide investors with a number of potential benefits. One is the ability to trade and observe the price of an ETF throughout the day. However, this benefit can turn into a drawback if certain best practices are not followed, such as: