How do you really know what your mutual fund is invested in? Has the fund manager started to chase returns to prop up the fund’s lagging performance? Has the fund been “churned”? Churning is the continual buying and selling of investments to generate brokerage commissions but a mutual fund could be the victim of churning if the fund manager is planning to jump ship and it’s in his best interest.
The point is: you just don’t know with a mutual fund. I’m sure that the majority of mutual fund managers are ethical and operate legally, but I personally prefer to invest MY hard-earned money in ETFs with their better transparency.
How to buy ETFs
You’ll have to open an account at a brokerage company. Click the links below to get further information:
- Scottrade – you can buy Focus Morningstar ETFs commission free!
- Etrade – helps you get started investing in three easy steps
- TradeKing – offers regular trades and broker assisted trades for only $4.95
- tradeMonster – offers mobile trading
- Zecco – has commission free trades available
- ShareBuilder – invest for only $4 on an automatic investment plan