Betterment Warns On Dangers Of Sector ETFs

By Rachael Revesz

Heavyweight robo adviser Betterment has hit out at sector exchange traded funds (ETFs), arguing they are not ideal passive tools for diversified portfolios as they are more expensive and have higher turnover. But European ETF providers have hit back, claiming these ETFs allow for more targeted exposure.

In a blog for ETF.com this week, Betterment investment analyst Ellie Lan wrote that sector ETFs “not only rack up more fees when it comes to expense ratio, internal fund turnover, and bid ask spread, but they also require more work when it comes to rebalancing”.

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This article originally published October 8th, 2015 on ETF.com.