ETFs in Your 401(k)?
You knew it was going to happen eventually. Today, I read an article on Yahoo Finance that confirmed my suspicion that ETFs soon will make their way into 401(k) plans.
According to the article, provided to Yahoo Finance by The Wall Street Journal, Jim McCool, Charles Schwab’s executive vice president of institutional business, “made waves at an asset-management conference in March when he announced that the brokerage firm soon would offer 401(k) retirement plans stuffed solely with exchange-traded mutual funds — and let investors trade them without charge.”
The article went on to say that Schwab has plans to stick to “plain-vanilla index ETFs, including domestic and international stocks and bonds” for their 401(k) offerings. Schwab reportedly will begin meeting with 401(k) plan sponsors this fall to work out the details of such offerings.
If this happens, and I certainly expect it to, then it could open the proverbial floodgates for more 401(k) plans to add ETFs to their investment offerings. That would be a very good thing indeed, and something that I suspect will help investors save money, enjoy greater transparency of holdings — and ultimately gain more control over their retirement portfolios.
Kudos to Schwab for taking this step in the right direction.
Jim Woods is a 30-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor.
His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. Read more about Jim Woods.
