Barrons' Brendan Conway responded to a theme in colleague Steve Garmhausen's weekend piece on mutual fund managers using ETFs.

Garmhausen pointed out that there are about 100 funds holding at least 80 percent of their assets in ETFs, according to Morningstar data, using ETFs for "tactical purposes." Conway writes that these funds are expensive, charging an average of 1.55 percent compared to 1.39 percent of corresponding categories of funds.

It seems ill-advised for an investor to pay a mutual fund PM to use a relatively simple strategy investors may be able to figure out on their own, Conway writes. Returns of some of these funds didn't yield great returns, Conway points out, with CLS Investments [profile] AdvisorOne Amerigo fund seeing a three-year return of 12.3 percent vs. the S&P's total return of 17.9 percent.

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Edited by: Casey Quinlan


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