Danger Zone 12/24/2012: Schwab U.S. REIT (SCHH)Danger Zone 12/24/2012: Schwab U.S. REIT (SCHH)

Danger Zone 12/24/2012: Schwab U.S. REIT (SCHH)

Two factors drive my overall rating of an ETF:

Most investors are excellent at assessing the costs of funds. However, my study of ETF (and mutual funds) shows that investors are not good at assessing the quality of an ETF’s holdings.

As detailed in Low Costs Dupe Investors, 55% of fund assets are in ETFs and mutual funds with low costs but only 6% of assets are in ETFs and mutual funds with Attractive holdings. This discrepancy is astounding and it speaks to the lack of research and transparency into fund holdings. I am working to change that.

One of the best examples of an ETF with low costs but poor holdings is Schwab US REIT (SCHH).

With total annual costs of 0.08%, SCHH is one of the chea...