Video: What are ETFs and why are they so popular?

The latest FWB TV video has been posted at FWBSecurities.com and Findependence.TV. It’s entitled What are ETFs and why are they so popular?

It’s a three-minute primer on ETFs (Exchange-traded funds), featuring Hector McNeil of WisdomTree Europe. He says ETFs are growing exponentially and while they are currently just 12% of the mutual fund industry at just under US$3 trillion it won’t be long before they pass the US$10 trillion mark and gather assets that will be between 30% and 50% of the mutual fund industry.

That said, he issues three caveats: that you shouldn’t assume all ETFs are low-cost, and you still need to consider the issues of diversification and trading costs.

Here’s what Financial Wealth Builders president Paul Philip says about the segment: “I have heard many people confuse Index Funds with ETFs but they are not the same thing at all. Some think they are a one-size-fits-all solution but they are definitely not that. At the end of the day, it can still be active management, which has inherent risks and costs associated with it.”