Is there a place for ETFs in 401(k)s?

Exchange-traded funds are gaining traction in 401(k) plans, the Wall Street Journal reports. BlackRock Inc. estimates that investors hold at least $2 billion worth of the company's iShares ETFs in 401(k) plans, according to the paper. However, the funds' benefits are somewhat diluted in a retirement plan.

To keep brokerage commissions low, 401(k) plans pool many individual investors' trades, eliminating participants' ability to trade all day long, the Journal writes, and retirement plans already allow investors to avoid capital gains taxes. Furthermore, 401(k) plans already have low-cost options.

One benefit on ETFs side is that they don't accommodate revenue sharing, making it easier for investors to see where their money is going. But, some plans add separate administrative fees, essentially charging for this transparency.