Morningstar’s Paul Justice and Mike Rawson discuss the differences among the major index families and how to manage market exposures and taxes using ETF holdings. Specifically, they focus on the Dow Jones family of indexes, Standard & Poor’s, Russell, and MSCI. They explain that when you buy a bunch of mutual funds, it turns out that you’re going to wind up looking somewhat like an index, so instead of buying a basket of high cost mutual funds, why not just buy one or two ETFs at a lower cost, which will at the end of the day give you very similar exposure or in fact, better, more targeted exposure to an index than the basket of mutual funds.
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