Don’t be surprised if you don’t know the difference between a benchmark ETF and a strategic ETF. Strategic is sometimes called “Fundamental” or “Active” and they differ from the ETFs we recommend for our ITA portfolios. To read more about the differences, check out the URL referenced below.
Richard Ferri writes about the increasing complexity of the ETF world in a Forbes article, “Not Your Father’s Index Fund.” Here at ITA Wealth Management, we keep it simple by sticking with low cost benchmark ETFs. The alpha we add to the portfolio comes through the asset allocation mix.
When I first started using ETFs over fourteen years ago, all the ETFs I was following were designed to track a specific benchmark. As the ETF world mushroomed, new products came on line and many of those new ETFs were actually managed buy someone or some quantitative algorithm. With the poor history of actively managed mutual funds, why would anyone want to step over to actively managed ETFs. No thanks. We will continue to stick with our low cost benchmark ETFs.