There’s a lot in a name February 4, 2012
Posted by forwardfinancialplanning1 in Exchange Traded Funds (ETF).add a comment
It’s been said that individual investors should view many Wall Street “innovations” with a healthy degree of skepticism. Like most things in life, this statement is not always true, nor is it always false. Exchange Traded Funds (EFT) fall into this class, being heralded as a better version of the common mutual fund. This may be true in that properly structured ETF’s offer the possibility of intraday trading and can display extremely low expense ratios. However, some observers, including the esteemed Vanguard Group founder John Bogle have dismissed ETF’s as “trading vehicles.” As such, Bogle claims, they entice people to trade too frequently which can be hazardous to one’s financial health.
Regardless of where one stands on this issue, we recently came across an ETF with perhaps a ”hint” embedded in its ticker symbol. The Teucrium WTI (West Texas Intermediate) Crude Oil ETF allows investors to gain exposure to the spot market for oil and uses a tiered weighting scheme to invest in multiple months of crude oil futures contracts. Sound like something of interest? A little research indicates an enormously high expense ratio of 1.58%, but perhaps more revealing, a ticker symbol of “CRUD”. At least in our opinion, that’s a very apt description!!
