Chapter 15

Working Non-ETFs and Active ETFs into Your Investment Mix

In This Chapter

arrow Incorporating ETFs into an existing portfolio of mutual funds or individual securities

arrow Spotting potential holes in an ETF portfolio

arrow Choosing investments that best complement your ETFs

arrow Understanding the difference between ETFs and ETNs

arrow Taking a chance with active ETFs

When I wrote the first edition of this book in 2006, building an entire, optimally diversified portfolio out of ETFs was just about impossible — sort of like trying to paint a landscape with no blues or yellows. There were holes, and many of them. You could not, for example, buy an ETF that gave you exposure to tax-free municipal bonds. Or international bonds. Only one ETF at that time allowed you to tap into international small cap stocks. And none allowed for investing in international REITs.

Back then, when there were but 300 ETFs from which to choose, and many of those tracked the same kinds of investments (such as large cap U.S. ...

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