Exchange traded funds (ETFs) continue to dominate cash flows into investor portfolios — and for very good reasons. But ETFs have one feature that is dangerous for many investors, so it’s up to investment advisors to ensure these useful investment vehicles are properly managed.

ETFs are grabbing big chunks of market share from mutual funds, and they will continue doing so in the year ahead. Though mutual funds truly rank among the top innovations in the history of finance (they provided the opportunity for all investors to attain diversified, professionally managed portfolios at a reasonable price), ETFs are a better technology. And that’s good for investors.

There are a few reasons ETFs are better.

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