Exchange Traded Funds

Envoy Financial is pleased to announce that Plan Sponsors may now elect to have Exchange Traded Funds (“ETFs”) as an investment selection for their Plan Participants! The Envoy Choice Basic Investment Menu of ETFs, reflects Envoy Advisory’s ongoing commitment to carefully select and present the lowest cost investing solutions available in the financial marketplace, while maintaining relatively strong investment returns versus industry peers and the relevant performance benchmark(s). 


What is an Exchange Traded Fund?

An ETF differs from traditional mutual fund shares in a few distinct ways. First and foremost, is the fact that ETFs are generally passively managed versus an actively managed mutual fund. In practice, this means that the ETFs Envoy will offer are generally indexed ETFs that track a particular index, asset class, or risk profile. Second, because they are indexed, the fees for managing and administering the fund are significantly less than a fund with a portfolio manager, research staff, marketing and advertising expenses, commission payouts, etc. The goal of an indexed ETF is to replicate or mirror the index, not to actively try to beat it by making active investment decisions.

Will Envoy offer sector specific ETFs?

At this time, Envoy Advisory will not be offering any sector specific, leveraged, or narrowly focused ETFs. These types of ETFs have garnered some negative attention because they are designed more as trading vehicles, not as a core holding in a retirement portfolio geared for long-term growth at a reasonable cost. In other words, each ETF investment selection made available on Envoy Choice will still be fairly well diversified within itself, e.g. an ETF that tracks the S&P 500. Envoy Advisory, through its due diligence process reduces risk by focusing on core ETFs that are easy to understand, liquid, and are provided by the leading financial institutions in the market.