What makes one ETF a good investment over another? The answer will vary depending on your portfolio, tolerability, and risk. In a recent Wall Street Journal article, Mitch Reiner shares his thoughts about fine tuning portfolios based on investor risk and preference.
Rather than a one-size-fits all approach, income investing (particular with ETFs) can vary for each client and is often determined by investor risk and preference. Through February, investors poured more than $20 billion into bond ETFs—67% of net flows to all exchange-traded products, according to research firm XTF Inc.—as they looked to sync their fixed-income exposure with a view on rates.
While flexibility is one of the great benefits of the over 250 fixed-income and bond ETFs—allowing investors to pinpoint portfolios for desired levels of credit and rate exposure—there are investors seeking something more simple: a low-cost, one-size-fits-all approach to bonds.
“It’s not surprising given the amount of choice in the ETF market that investors might want to look for one product to do it all,“ says Reiner. However, building off certain funds and fine tuning the approach is still an important staple for investors who want to adapt to a shifting rate environment.
Nevertheless, some investors are looking for ways to simplify their bonds. Read more on this story in the original Wall Street Journal article.