Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:Fees in Zombie ETFs Bite Investors Not Rated 0.0 Email Routing List Email & Route  Print Print
Wednesday, August 26, 2009

Fees in Zombie ETFs Bite Investors

News summary by MFWire's editors

That not all ETFs are created with equally low costs is a fact that may be about to sink in with financial reporters. The WSJ's Fund Track picks up on this fact in an article by Eleanor Laise. She reports that more than one quarter of ETFs sport "high" trading costs. The article appears to draw the line for high at a trading spread of 50 bps or more.

The article also points out that the average expense ratio of ETFs have drifted up to 56 bps from just 40 bps in 2005, according to research by Citi Investment Research.

One reason for the high spreads and rising expense ratios is that many of the ETFs on the market have relatively few assets.

Matt Hougan, director of ETF analysis for IndexUniverse.com even gives these small products a cute name: "zombie ETFs".

The ranks of the zombies will likely only grow as more than 500 ETFs are currently in the registration pipeline even as the seed funds for new product has been mostly turned off.

"Can we get as much seed capital as we could get two years ago? Absolutely not," Jim Ross, senior managing director at State Street's State Street Global Advisors, tells Laise.

That means that the size of new products has shrunk to just $5 million to $10 million in seed capital from $20 million in more flush times. 

Edited by: Sean Hanna, Editor in Chief


Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE

0.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2024: Q2Q1
2023: Q4Q3Q2Q1
2022: Q4Q3Q2Q1
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Raw XML
Add to My Yahoo!
follow us in feedly




©All rights reserved to InvestmentWires, Inc. 1997-2024
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use