(New York)

While the idea is more important for retail investors, we thought Bloomberg’s article today warning about buying ETFs might also be relevant for advisors. Bloomberg argues that the name “ETF” has become so vague as to be almost meaningless, and that investors need to be very disciplined in understanding the fund before buying it. The catch-all term “ETF” now encompasses everything from ultra-low cost index tracking funds to hugely leveraged volatility funds, all traded under often simple names and tickers.

FINSUM: The name of the game here is to read the fund prospectus and deeply understand the product being bought. But advisors already know that!