A Closer Look at Build-Your-Own-Fund Web Sites

Some of you may remember a column I wrote last July that mentioned Foliofn.com. Foliofn.com is an online brokerage that lets you create baskets of stocks and then trade them with a single mouse click.

It's an intriguing idea and one that ties in nicely with the popularity of exchange-traded index funds such as the Standard & Poor's Depositary Receipts (SPY Quote), or Spiders, iShares and HOLDRs that trade on the American Stock Exchange. (For more on exchange-traded funds, see Everything You Want to Know About ETFs.) The stock baskets you build with Foliofn.com are a little like index shares. But, as you'll see, there's a lot of flexibility in how you may customize them.

No surprise, a competitor to Foliofn.com, called NetFolio.com, is due to launch sometime this fall. Another site, unx.com, has adapted the concept for professional money managers. I'll save unx.com for a future column. For now, let's quickly compare Foliofn.com and NetFolio.com. Then we can tackle the bigger question: Does it make sense to invest by purchasing baskets of stocks at these sites?

Dueling Folios

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