ETF Fund beginning for smaller investors (Investor's Business Daily) (30-05-2008)

A new ETF fund, the Bell Worldwide Trends Fund, has been launched by Bell Investment Advisors last week, aiming at smaller investors.

The portfolio manager says that the financial advisor has been focusing on high net worth families for years, and has now decided to cater for smaller investors. ETFs offer a way to do that more cheaply than starting an open-ended mutual fund with stocks, as it is easier to diversify over many stocks at once, cutting down the capital gains costs.

A fund of ETFs also doesn't require as many analysts with industry expertise.

Ordinarily clients have to have hundreds of thousands for Bell to take them on, but the fund of ETFs offers a way to serve people with as little as $2,500.

Morningstar tracks 57 funds that invest at least 70% of their assets in ETFs.

Of the 13 with three-year track records, the average return is 7.68%, while the S&P 500 has returned 6.95%.

The funds of ETFs returned an average of -2.52% year to date, vs. -4.87% for the S&P.

That average doesn't account for the variance between asset classes.

Among the Morningstar fund categories, diversified emerging markets funds brought in 16.97% over the last year.

  Source Investor's Business Daily