The words of investment guru Warren Buffett are ringing in the ears of ETF critics, questioning the role of many new exchange-traded fund products. Since Buffett, helmsman of Berkshire Hathaway (BRK.A - Get Report), suggested that traditional low-cost index mutual funds might be more appropriate for portfolios than ETFs, a host of new exchange-traded products have hit the market with mixed results.While ETFs have introduced transparency and liquidity to the fund business while adding a wide range of low-cost products, problems have emerged as average investors embrace the funds. Overtrading, illiquidity and inappropriate funds have plagued shareholders, raising Buffett's 2007 concerns once again as investors leave index mutual funds for the open market.
Buffett's Words on ETFs Ring True
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