Investors have long sought to generate investment returns with a variety of objectives, including above average performance and/or consistency.  Over time, investors and their advisors have developed a range of strategies, initially with carefully selected individual securities.  Later, new options emerged through actively managed mutual funds, passively managed Index funds, ETFs, and, more recently, highly focused ETFs.

There is no one right strategy for all investors, as individual means, objectives and risk tolerance vary.  Some investors prefer focused portfolios made up of individual securities that reflect their needs, while others prefer broadly based funds. While most funds, both the actively and passively managed, are broadly based, in recent years there has been a movement towards highly focused funds.

Focused funds tend to involve greater risk, and potentially greater rewards, at the expense of diversification.  That’s fine, as long as you understand that just because you are investing in a fund doesn’t mean that you are diversified.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA