The Danger Zone Pick: 10/1/12

In my weekly Danger Zone interview with Chuck Jaffe, I highlight one of the worst ETFs in the market as well as my unique analysis of ETFs.

The guts of an ETF are its holdings. And an ETF’s guts are what drive my ETF (and mutual fund) ratings. As highlighted in Barron’s The Danger Within, the only truly diligent assessment of an ETF or fund is based on its holdings.

Research on an ETF’s holdings is important because an ETF’s performance is only as good as its holdings’ performance. Therefore, if you care about performance, you care about the ETF’s holdings. No matter how cheap an ETF is, if it holds bad stocks, performance will be bad. Low expenses on bad performance still results in bad performance.

PERFORMANCE OF ETF’s HOLDINGs = PERFORMANCE OF ETF

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