Investment Help

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Wednesday, April 6, 2011

A Tool for DIY Investors - Schwab ETF Select List

There are now thousands of ETFs, and they are proliferating almost faster than stink bugs. The challenge today is how to select among all the ETFs available.

One approach is to use, or at least start with, the Schwab ETF Select List. This list highlights the best ETF for each category, according to Schwab, based on wide ranging criteria, including "...assets under management, length of track record, trading volume, bid-ask spread, tracking error of the ETF to its underlying index....." The investor considering this resource should read the one-page write up of the selection process. DIY Investor and the working guy carrying all the tools, likes the fact that the list "...excludes leveraged ETFs, inverse ETFs, ETNs, actively managed
ETFs, muni bond ETFs with underlying holdings subject to AMT, and unmanaged baskets of securities

Source: Schwab
How would a DIY investor use  this list?  Suppose, for example,  after the recent events in Japan, you were interested in seeking a Japan ETF. One way to proceed would be to pull up the 2-page Select List and look at the "International Equity ETFs" shown on the left.  CLICK TO ENLARGE.  Immediately, you find a Japan ETF, EWJ, and see its expense ratio and whether it has a trading commission.

Test question:  How fast can you find Schwab's recommended ETF for the telecommunications sector?

Disclosure:  I am not affiliated with Charles Schwab. The information in this post is for educational purposes only.