No fees are commonly cited as investors’ main attraction to passive investments. ETFs, in particular, have drawn a tremendous amount of money from actively managed mutual funds, which generally charge significantly more for what in some cases is a similar strategy.
According to a new report from Bank of America Merrill Lynch, the expense ratio should not be the only factor investors consider when looking at ETFs. The report, titled “ETF evaluation process & rating system,” considers the current state of the ETF market, and seeks to provide a framework for ETFs that may provide some level of alpha over peers.
Mary Ann Bartels and Elias Lanik, BoA’s ETF analyst behind the report, use a fusion of technical and fundamental analysis to try to uncover the market’s best ETF plays. The acronym that used to describe this process is “ETF.” As per the report:
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