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Strategies & Market Trends : Fidelity Select Sector funds -- Ignore unavailable to you. Want to Upgrade?

To: Julius Wong who wrote (3712)	5/14/2001 7:13:15 AM
From: Julius Wong	Read Replies (1) \| Respond to of 4916

May 14, 2001 Exchange-Traded Funds Open Whole New World By THEO FRANCIS Staff Reporter of THE WALL STREET JOURNAL ... ... ... ... Do ETFs really cost less than regular index funds? Often they do, but not always. ... ... ... ... Do ETFs always offer tax savings? Often, but not always. ... ... ... ... Are all ETFs equal? No. Some are much bigger than others. ... ... ... ... Are ETFs only useful as short-term investments? No. Because many ETFs are in themselves diversified, investors can use one or two broad-index ETFs as their central investments, and then weight their portfolio toward other sectors or regions -- health care or Asia, for example -- using more specialized but still diversified ETFs. "ETFs are the horse that pulls the cart of all the other investment ideas," Mr. Kelly says. They "create vast diversity on a very cost-effective basis." But investors also should be aware of the lack of diversity of highly specialized sector ETFs, which can quickly be dominated by one or two highflying companies, says Greg Schultz, a principal at Asset Allocation Advisors Inc. in Walnut Creek, Calif. "If you look at them, they're hardly a well-diversified basket for a particular sector." interactive.wsj.com