We took a look at three common misconceptions that can contribute to increased costs. Explore each of them to find out how to avoid these costly mistakes.
An ETF's expense ratio and trading costs are not correlated — so a low-fee fund may not have the lowest total cost of ownership (TCO).
To calculate an ETF's cost, a combination of technical and strategy-specific factors come into play:
Learn how to account for the true costs of owning an ETF before you make your next trading decision.
Investors often use point-in-time statistics like 30 or 90-day average trading volume to analyze an ETF's liquidity.
But a fund's liquidity profile can change in different markets. Your ETF due diligence should:
Get the roadmap for navigating the twists and turns of an ETF's liquidity dynamics.
ETF investors can choose from a variety of execution strategies to control cost.
Because ETFs trade on an exchange with primary and secondary market liquidity, you have the flexibility to choose:
Learn how to more effectively execute your ETF trades.
Frequent trading of ETFs could significantly increase commissions and other costs such that they may offset any savings from low fees or costs.
Diversification does not ensure a profit or guarantee against loss.
Investing in commodities entails significant risk and is not appropriate for all investors.