ETFs Are Duking It Out Over Fees

By
June 04, 2012
Share:

Related ETFs

Ticker Fund name
GLDSPDR Gold
IAUiShares Gold Trust
Related ETF Lists
Gold ETFs

 

Investors are often running into virtually identical funds—like the iShares Gold Trusts (NYSEArca: IAU) and SPDR Gold Shares (NYSEArca: GLD)—that seem only differentiated by fees. But it may not be worth it to switch funds for small fee disparities, according to an article in the Wall Street Journal.

Though lower fees appeal to investors and draw in newcomers, cashing out of a fund to move toward the cheaper option could backfire if the gains from the sale triggers a tax bill, the article said.

Also, funds with a higher fee may provide investors with a sense of security, as the more expensive fund could hold more assets under management, which affects liquidity, the article said.

Whether the increased attraction to lower fees causes ETF sponsors in general to lower their prices, the end result will wind up benefiting investors, the Journal said.

For more information, visit online.wsj.com.

ETF.COM CHANNELS

Want to learn more about smart-beta ETFs? Check out our smart-beta guide, essentials library and ETF screener!

ETF DAILY DATA

'VTI,' Vanguard's U.S. total market fund, led inflows on Wednesday, July 1, as total U.S.-listed ETF assets climbed to $2.123 trillion.

A slew of iShares funds paced the firm's issuer-leading inflows on Wednesday, July 1, as total U.S.-listed ETF assets rose to $2.123 trillion.

ETF.COM ANALYST BLOGS

By Drew Voros

Why is putting a client’s interest first not the industry standard?

By Matt Hougan

Contrarian plays, bad investing and authenticity in social media dominated the day.

By Dave Nadig

While they bring added risk, they can bring added returns.

By Olly Ludwig

The ETF world is a hotbed of interesting new ideas, as this week’s launches make clear.

ETF INDUSTRY PERSPECTIVE

By Invesco PowerShares

Smart beta appears to be poised for further growth.

By Dorsey Wright & Associates LLC

So many sectors, how do you choose? A quick guide from Dorsey Wright.

By Nasdaq Global Indexes

Bond exposure or bond performance? Only defined maturity indexes provide the latter.