ETFs can be very beneficial in 401(k) plans

On April 10, 2015

iSectors’ ETF models are not only available to standard wealth managers, they are also available in any 401(k) plan. This might be hard to believe since, historically, ETFs have not usually been associated with 401(k) plans. Through the use of various turn-key solutions and an investment vehicle called a Collective Investment Trust (CIT), iSectors has made accessing the benefits of ETFs and ETF strategies easier than ever before.

Let’s take a look at how exactly the use of ETFs can be very beneficial in 401(k) plans:

Before the advent of Exchange-traded funds (ETFs) only wealthy individuals and families could access the best private wealth managers and hedge funds. Those days are now long gone. ETFs have leveled the playing field by taking away many of the investment privileges that once came with huge amounts of investment wealth. Today, an individual company 401(k) retirement plan participant with $1000 has the access to the same investment management strategies as a wealthy individual or family with $100 million.

ETFs invested in a company’s 401(k) retirement plan account can offer the same access to some of the best stock and bond investment management strategies available. Many of the best investment management minds in the world now have an exchange-traded product. These managed ETF investments can take the guesswork out of a company 401(k) retirement plan’s asset allocation plan. ETFs also provide entry into the all-important low levels of investment advisory fees.

Individual company 401(k) retirement plan investments now include annual investment fees equal to the largest pools of money in the world. Mutual funds are an older way to invest company 401(K) retirement plan assets.

ETF-based investment vehicles can offer the opportunity for better investment performance and lower investment fees.

 

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