According to MarketWatch it looks like TD Ameritrade (AMTD) is gearing up for a strong push to help educate investors and introduce a brand new form of ETF called a Lifecycle ETF. TD Ameritrade currently offers an advisory service called Amerivest which helps investors learn about and build portfolios based on ETFs. The fees for this service are a modest 0.5% annual fee for accounts under $100,000 and 0.35% for accounts larger than $100,000. For individual investors who are looking for professional guidance without the high fees of using an advisor or paying for funds with front loads this is an affordable solution. TD Ameritrade is planning on an even stronger push in the education of investors through this service and beyond.
In regards to the lifecycle ETFs the information is still very limited. I would assume that they will follow the fund of funds approach of target date and asset allocated mutual funds. In a sense the lifecycle ETF would contain a mix of various ETFs to create an asset allocation based on investment objective and where someone is in their life in regards to retirement. This would provide a simple yet low cost option for investors to diversify their assets appropriately.
This is an interesting development in the ETF world and I will be covering the progress as more information becomes available. We have all heard the benefits of using ETFs for long-term investing so the introduction of a new concept should provide even more options for investors in the future.
Author: Jeremy Vohwinkle
My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.