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What costs will I incur by investing in ETF?


Carlyn
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Hello, I'm planning on investment money in ETF. My only worry is the attached costs to expect. I would like to know the costs I will incur by investing money in ETF. I want to understand the kind of market I am pursuing and if it's worthwhile. 

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Hello Carlyn,
Like any other traded funds, while dealing with ETF, you are bound to pay for several expenses. The exchange-traded fund operates as a typical company, and companies have to incur costs in the course of their operations.
One of the apparent costs you suffer is that of brokerage commissions. ETFs usually operate like stocks. And naturally, stocks will incur brokerage fees, so are ETFs. These commissions are generally different and depend on how frequent an investor is trading.
You will also suffer Management Expense Ratio (MRE) while trading with ETFs. They come in the form of the management fee, which is usually paid to the administrator of the fund for being a trustee and managing the fund.
 MRE also constitutes operating expenses. These operating expenses may be fees that are to be paid to the members of the council of the EFTs.
Many other costs are normally suffered during the buying and selling of an EFT. Good luck!

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