Motley Fool ETF Coverage is Shockingly Shallow

by: Roger Nusbaum

Roger Nusbaum submits: That was my reaction when I read an article from Motley Fool called Not Your Daddy's ETF. I wrote for Motley Fool in 2004 and was very underwhelmed every step of the way. I wanted to get more into ETFs because I did not feel that there was consistently good coverage anywhere yet, and it was clear that ETFs were well on the road to becoming a very important tool for do-it-yourselfers. At the time they had no interest.

Here are a couple of nuggets from the Fool article;

But what's new, you ask? Well, new from Rydex Investments, for example, are ETFs that track foreign currencies. If you're bullish on the euro, you can invest in the Euro Currency Trust (NYSE: FXE) , and similar ETFs now exist for the Mexican peso, Swedish krona, Canadian dollar, and more.

Or how about this in depth bit of mental heavy lifting:

ETFs also let investors focus on specific sectors, such as oil-drilling or retailers.

These are entire subjects in the article. The depth is shockingly shallow, shockingly. This is not a shot at the author, if you read her bio it is clear she is very smart, she has much better education than I do, to be sure.

I believe this speaks to how the Fool does things. The article tells you that certain funds exist, and that's it.

This bugs me as a pet peeve. I believe the Fool wants to help people be better investors, as a goal, but this article along with any other article about ETFs from the Fool that has ever hit MyYahoo ETF-news feed has been just useless.

The analysis I try to do seems to be sort of popular, which amuses me because it is so simplistic; it is consistent, but simplistic nonetheless. When I first started writing, there was very little under-the-hood analysis to be found. Now there is more, but hopefully there will be more still.

When an author/blogger tries to deconstruct a fund and gives a true effort, even an incorrect conclusion can be useful if the writer shows his work, so to speak. Real analysis that delves into process has value. If the conclusion is wrong, you might learn what not to do, and if the conclusion is correct you might learn what you should do.

Something like 'Well there is a water ETF and a new biotech ETF' is utterly useless. If you actually give them money and you care about ETFs, maybe it is worth mentioning?

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