Over the past decade, passive investment strategies have seen enormous growth in assets under management — and with good reason. Many passive exchange-traded funds (ETFs) and index-tracking mutual funds offer low-cost, tax-efficient opportunities to access broad market returns by mirroring major market indices, such as the S&P 500 or Nasdaq 100.
Although passive index trackers are inexpensive, they may not offer as much control over your financial journey as you think. For investors seeking to align their portfolios more closely with their long-term financial goals, it’s important to understand the nuances of the passive investment universe. Before exploring them, however, it’s important to consider three key questions: What exposures are you seeking to gain? How much are you really prepared to pay in fees? And how can you position your portfolio to be tax-efficient?
Your decision can have a lasting impact on your wealth goals. In today’s volatile environme