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The cost to run an etf does not (or at least should not) increase with Assets Under Management (AUM). So if anything the providers should be charging a fixed fe
by fiveFeet 8y ago
The cost to run an etf does not (or at least should not) increase with Assets Under Management (AUM). So if anything the providers should be charging a fixed fee for the whole index fund instead of charging based on the AUM.
- slivym 8y agoThere's a cost associated with buying and selling the underlying equities which is proportional to AUM.
- jonknee 8y agoIs there? For large index ETFs that is surely done by broker dealers arbitraging miniscule pricing differences between the underlying and ETF price.
- fiveFeet 8y agoHmmm... why? What is so different between trading 100 shares vs 1,000 shares vs 100,000 shares? Trading is automated enough that a linear cost is not justified.