Mutual Funds' Last Stand: Non-Transparent ETFs

The rise of exchange-traded funds has been fast and furious, starting from scratch 30 years ago and rising to command almost $5 trillion in assets. Now, ETFs pose a major threat to traditional mutual funds because of the availability of intraday trading and their low costs.

Mutual fund companies have come out with a response: non-transparent ETFs. These ETFs mimic some of the proprietary elements of traditional mutual funds, but offer investors the same ease of trading as any exchange traded fund. With somewhat lower fees than their corresponding mutual funds -- but still higher than a typical index ETF -- non-transparent ETFs represent a last-gasp effort from mutual fund providers to preserve their market share and give investors an alternative to switching to regular ETFs.

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Source Fool.com