ETF Investors: Three Resolutions
By Don Dion
01/01/10 - 06:40 AM EST
NEW YORK (TheStreet) -- Here are three resolutions for ETF investors everywhere in 2010.
As 2010 begins, ETF investors have a unique opportunity to re-examine their strategies, evaluate their holdings and appraise the expanding universe of exchange-traded funds. Disparate responses to the financial crisis and regulatory concerns marked the advance of the ETF industry in 2009. The abrupt rise of leveraged funds and subsequent regulatory concerns helped to increase awareness of ETF structure.
Enthusiasm for futures-based commodity products, like the United States Natural Gas ETF (UNG Quote), was met by trading restrictions in some products and closure for others.
It is a time for ETF investors to reflect on the lessons learned in 2009, and employ this new knowledge in the 2010 trading year. Here are three resolutions for ETF investors for 2010.
Assess Your Objectives
As ETF issuers heap a bevy of new products onto the market, investors should be mindful of both the strategy and scope of funds in their portfolio. ETFs with a broad range, like the SPDR S&P 500 ETF (SPY Quote), and those with a narrow range, like the Market Vectors Steel ETF (SLX Quote), co-exist in the same marketplace. It is important for investors to assess their objectives before adding to their portfolio.
Trying to add broad sector exposure to a diversified portfolio? Remember to look for ETFs that encompass a broad, balanced selection of firms. Investors looking to add long-term exposure to commodity producers should, for instance, check out ETFs like Market Vectors Hard Asset Producers (HAP Quote), before purchasing a more narrowly themed fund like SLX.
