The subject line should probably read “Yet another reason to hate ETF’s.”
If you missed the announcement, Fidelity recently proclaimed to be the first investment firm to offer a NO FEE INDEX ETF. (Exchange Traded Fund).
No Fee? LOL!
Who are they kidding?
Who do you think on Wall Street works for free?
No one? Good guess.
Numerous times before we’ve written about what we see as hazards to owning ETF’s. (Here, Here, Here, Here, and Here)
You might say we’re kinda biased. But that’s okay. We give you plenty of evidence to back it up. (Click the links and see for yourself).
Let’s just say that we’re very skeptical when it comes to behemoth firms like Fidelity claiming to give you something for nothing.
Just for kicks, I’m gonna wait until they offer a negative fee ETF before I get on-board. (A negative fee ETF means they pay you to buy their fund).
Seriously though, I have a few questions for Fidelity or Vanguard, or Blackrock, etc., about $0.00 fees for funds:
Is it possible your $0.00 fee ETF only covers stocks that you’re trying to sell from your internal portfolios?
Is this fee-less ETF a sign you’re out of the market?
Or is it a sign you’re getting out of the market?
Or is it possible that this special ETF is only available for current accounts that are already paying a monthly management fee?
Enquiring minds want to know.
Honestly, I don’t expect to get a straight answer because Fidelity is a marketing master.
They also know that in a crashing market they (Along with Vanguard, and Blackrock) are too big to sell their positions without creating an even bigger crash.
Read about how you CAN’T get out when things get ugly HERE.
You’ll thank us later.