It is well-documented that most active managers fall short of their benchmarks over longer periods, and 2011's range-bound, trendless market is proving difficult for many. By following an index, ETFs will consistently adhere to a set guideline and investment style.
While a passive, indexed-based strategy with ETFs may seem rather boring, history has shown that attempting to beat the market usually ends in failure.
Disclosure: Tom Lydon is a board member of Rydex|SGI.
Tom Lydon is editor and publisher of ETF Trends, a Web site with daily news and commentary about the fast-changing trends in the exchange-traded-fund (ETF) industry. Lydon is also president of Global Trends Investments, an investment advisory firm specializing in the creation of customized portfolios for high-net-worth individuals. Disclosure: At the time of publishing, Mr. Lydon's clients owned IndexIQ Agribusiness Small Cap ETF (NYSEArca: CROP).