This financial industry research endorsement has taken much longer than I ever expected. For the first time that I have seen, Morningstar, Inc. has taken a positive tone to the use of ETF’s (exchange traded funds) in a company 401(k) retirement plan account.
Morningstar, Inc. is a leading provider of independent investment research for both institutional and individual investors. Exchange traded funds are investments that trade like individual stocks.
In the September 16, 2014 article “A 401(k) fund most retirement savers still can’t have,” David M. Blanchett, the head of retirement research at Morningstar Investment Management make the following case for ETF’s in 401(k)’s.
“We’ve reached a point where it’s possible to buy ETFs that track the same indexes as comparable mutual funds, but at a lower cost. In other words, ETFs cost less to purchase, hold and sell than comparable “best-of-breed” low-cost mutual funds that track the same portfolio.”
This article is great confirmation for me as I build my individual company 401(k) retirement plan advisory business. The availability of ETF’s in a self-directed brokerage account option in a company 401(k) retirement plan has always been the linchpin of my business.
Ric Lager
Lager & Company, Inc.
