Cinthia Murphy is out with an article on etf.com about the cost of launching an ETF. I’m not sure who all she spoke with, but it looks like she did a good job of “ball parking” the costs. The article is informative and I’m sure eye opening for investors.
The expense ratio is typically the focus when it comes to the cost of an ETF. Most people have no idea what’s happening behind the scenes. There is a major process and multiple parties involved to get an ETF to the market and for ongoing operations. That process and those parties cost money – a good bit of it. I caught myself thinking “What kind of idiots would it take to launch an ETF”….but then I remembered…
If the underlying exposure the ETF provides is valuable, I strongly believe, there is no better vehicle for gaining that exposure. The structural efficiency the mechanics of an ETF bring to the table cannot be overstated. It’s part of our mission to educated investors on all the evidence supporting the previous sentence. ETF assets will continue to gain steam as more of this knowledge is widely held.
Here is the full article – it’s worth the read: LAUNCHING AN ETF IS NO CHEAP ENDEAVOR