Q: Are all ETFs better than actively managed funds?

A: No investment is perfect, but ETFs are built to be investor-friendly.

At Osbon Capital Management, we strongly favor ETFs for four reasons.

First, most ETFs are passively managed to track specific asset class performance, not chase fads or try to time the market. This allows accurate asset allocation when building a portfolio.

Second, as the chart above depicts, expense ratios are skewed to the low end compared to index and actively managed mutual funds, leaving more money invested.

Third, ETFs must report holdings daily, providing transparency that we consider essential.

Finally, unlike mutual funds, investors own their own individual cost basis.

But not all ETFs are created equal. We've looked under the hood and chosen about 60 of 700 ETFs for use in client portfolios based on cost, index tracking error, and sponsor stability. We're happy to share the list. Just ask.

Next time: Are international stocks too risky?

Contact: John Osbon 617.217.2772 josbon@osboncapital.com

Osbon Capital Management, LLC ("Osbon") is an SEC registered investment adviser with its principal place of business in the Commonwealth of Massachusetts. Osbon and its representatives are in compliance with the current notice filing requirements imposed upon registered investment advisers by those states in which Osbon maintains clients.

This Q&A contains general information that is not suitable for everyone and should not be construed as personalized investment advice. The information presented herein is based on a random sampling of ETFs, index funds, and active funds and there is not an equal number of each surveyed, which may alter results. The information is for informational purposes only and does not reflect actual client accounts. The expenses are not net of advisory and/or other fees and expenses. Past performance is no guarantee of future results. There is no guarantee that the views and opinions expressed in this Q&A will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security.

The historical returns are not net of advisory and/or other fees and expenses. Past performance is no guarantee of future results. There is no guarantee that the views and opinions expressed in this Q&A will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security.

For additional information about Osbon, including fees and services, send for our disclosure statement as set forth on Form ADV using the contact information herein. Please read the disclosure statement carefully before you invest or send money. For information pertaining to the registration status of Osbon, please contact Osbon or refer to the Investment Adviser Public Disclosure web site.