I’ve touched on this before, but it’s worth repeating. With the onslaught on new ETFs coming on the market, it’s important that you don’t jump in before you get all of the facts. I generally make it a habit not to invest in any ETF, or mutual fund for that matter, if there is not at least some 9 months of price data available.
This will allow me to track the trend and also observe the daily volume. A recent article in the WSJ called “Before you drive that hot ETF…” details other points for you to consider:
2. Trading Costs
3. Confusing choices
4. Aberrations from tracking an Index
5. Performance histories
6. Hedge Funds and high rollers
While not all points are critical, it pays to read the story to make sure that you are aware of some of the pitfalls you may have been unaware of.