ETFs Are Duking It Out Over Fees

By
June 04, 2012
Share:

Related ETFs

Ticker Fund name
GLDSPDR Gold Trust
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

Interested in China? Use our China ETFs Channel, library, and ETF screener.

Interested in oil? Use our oil ETFs channel, library and ETF screener!

ETF DAILY DATA

The small-cap ETF was in favor on Monday, May 23.

The top four ETF issuers all saw net outflows from their products on Monday, May 23.

ETF.COM ANALYST BLOGS

By Sumit Roy

Here's why the once-strong correlation between stocks and oil has weakened.

By Drew Voros

Leveraged and inverse funds are being traded like they were designed to be.

By Matt Hougan

This year so far, 772 ETFs have attracted assets, but one stands alone as defining where the industry is heading.

By Drew Voros

Some ETF names get right to the point; others take a lot more words to describe what they’re all about.

ETF INDUSTRY PERSPECTIVE

By Adam Patti

Is a momentum-focused approach a solution for fixed-income investors?

By Jack Fonss

An ideal ETF should be perfectly linked to its underlying.

By Kristi Kuechler

Avoid taking unrewarded—or unintended—risks.