| People get evaluating ETFs dead wrong. When we survey investors, the No. 1 thing they look at when evaluating ETFs is the expense ratio. But expense ratios aren’t nearly as important as other factors. Here’s the top three things investors should look at.
1. What does it hold? This seems simple but it’s not. You’d think, for instance, that the U.S. Oil Fund (USO) tracks the price of crude oil, but it doesn’t: It tracks the price of crude oil futures, and the difference is huge. Similarly, you’d think the Guggenheim BRIC ETF (EEB) and the SPDR S&P BRIC 40 ETF (BIK) would be similar. But one has 68% of its portfolio invested in China while the other has 40% Chinese exposure. Their performance differed by 10% in the past year...............................................Full Article: Source
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