When Investment Expenses Drop, You Win

cutting-costsNot surprisingly, many of our clients  are concerned with keeping investment expenses as low as possible.

That’s why we try to include low-cost ETFs (Exchange Traded Funds) as a component in client portfolios.

And that’s why we applaud last week’s expense reductions on four market-cap index ETFs managed by Charles Schwab Investment Management, all funds available to us as we manage your portfolios.

You may be surprised to hear that several of the ETFs managed by Schwab have among the lowest operating expense ratios in the industry, often lower than funds managed by Vanguard or iShares. That often astonishes some of the prospective clients we talk to, who mistakenly assume that Vanguard is the lowest-cost vendor on the block.

Fees are of course only one of the relevant factors we look at when selecting investments for a client’s portfolio, but it’s clear that ETFs, whether managed by Schwab, Vanguard, iShares, or other leading companies, can serve as part of the foundation of a diversified portfolio and offer distinct low-cost advantages.

Of course, every client’s situation is different, and due to varying market conditions and client goals, ETFs may not always be suitable, or may not be the best choice for an investor or a portfolio. There are times when an actively-managed mutual fund is by far the preferred option. But we firmly believe that having ETFs available to us as another outstanding tool in the investment toolbox provides more choice, more solutions, and better outcomes for our investors.

About Mari Adam

Mari Adam, Certified Financial Planner™ has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!


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