Why ETFs are not low cost option many believe

ETFs

Some big names have entered the fray about fund management fees and the temperature of the debate has risen.But there is still more heat than light.

It might aid understanding if fees are broken down into two elements; performance and costs. Moreover, costs themselves can be disaggregated into two elements, discretionary and non-discretionary. Much of the moaning about fees is a consequence of capital markets that have oscillated between lacklustre, abysmal, downright scary and, occasionally, euphoric. Poor performance giving flat or negative returns have caused investors to ask questions about costs that never bothered them when rising equity markets delivered gains almost irrespective of costs. Few took the trouble to ask if the...