Exchange-traded fund launches are on the rise, but not every new strategy is worthwhile. Investors should focus on ETFs that offer appropriate returns for the risks involved. Dan Sotiroff from Morningstar Research Services discusses hidden risks in stock ETFs and advises investors on what to look out for, emphasizing the importance of active risk and fees.

Sotiroff highlights the importance of balancing risk and return with ETF investments. Broad market funds tend to have the lowest active risk, while straying from benchmark portfolios increases individual company risk. He recommends avoiding expensive new investments and sticking to options with predictive power to maximize returns over the long term.

This year has been challenging for active managers to outperform passive peers. Bryan Armour explains how long-term trends can help investors identify the right active investments amidst market volatility and uncertainty. Morningstar’s Guide to ETF Investing offers insights on ETF types, costs, and investment strategies for those looking to optimize their portfolios.

Read more at Morningstar: What You Need to Know Before Choosing a Stock ETF