The more complicated and niche the index fund or ETF, the more some of its passive investing advantages may be eroded.

That's a warning the Wall Street Journal shared earlier this week in the monthly investing in funds Journal Report. The pub notes that on price, tradeoffs, trend-lagging and hidden costs, specialty index-based products can bite investors who turn to them.

The WSJ specifically highlights issues with the IQ Hedge Multi-Strategy Tracker ETF, some new SPDRs, the PowerShares S&P 500 Low Volatility ETF [profile], the First Trust ISE Cloud Computing Index ETF [profile], the IQ Merger Arbitrage ETF and First Trust Nasdaq Technology Dividend Index ETF. PowerShares managing director Ben Fulton, Anthony Hohmann of S&P Capital IQ, First Trust ETF strategist Ryan Issakainen, Morningstar passive funds research director Ben Johnson, Vanguard [profile] investment strategy unit principal Francis Kinniry, IndexIQ Advisors [profile] CEO Adam Patti and SSgA [profile] global ETF sales strategy chief Kevin Quigg all weighed in for the article. 

Edited by: Neil Anderson, Managing Editor


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