As Congress frets about 401(k) fees, the low cost of exchange-traded funds (ETFs) is attracting the interest of 401(k) plan sponsors. But the differences between ETFs and mutual funds traditionally have made it hard for 401(k) plans to add ETFs to their line-up of mutual funds. Now iShares, the Barclays Global Investors unit that is the biggest provider of ETFs, has teamed up with financial technology vendor SunGard to make it easier for 401(k) plans to use ETFs.

"The addition of SunGard makes any of the operational challenges a thing of the past," says Darek Wojnar, head of U.S. iShares product strategy and research.

ETFs have been problematic because they trade intraday, while mutual funds are priced just once a day. And since 401(k) participants make regular small investments, they can be hit hard by ETFs' trading costs, like the commission charged on each purchase.

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Susan Kelly

Susan Kelly is a business journalist who has written for Treasury & Risk, FierceCFO, Global Finance, Financial Week, Bridge News and The Bond Buyer.