Costs
Most open-end index funds can be purchased directly
from their distributors without a transaction fee.
Those bought through the discount brokers like Charles
Schwab or E*Trade usually include a transaction
charge of $15-$30 or more. Exchange-traded funds,
on the other hand, are subject to regular brokerage
commissions on all purchases and sales. An additional
cost to investors in ETFs is the "spread"
between the bid and ask price. This can amount to
over 1% of the purchase or sale price.
Expense ratios (ER) are very similar among ETFs
and open-end index funds. However, there is often
an additional cost of ownership to holding ETFs.
SPDRs, for example, pay dividends quarterly directly
to investors. An open-end index fund like the Vanguard
500 Index reinvests dividends into new shares as
they are paid. The delay of dividend reinvestment
with ETFs is often referred to as "dividend
drag."
|
Exchange-Traded
Fund
|
Symbol
|
ER
|
|
|
|
| Nasdaq-100
Index Tracking Stock |
QQQ
|
0.18%
|
| SPDRs |
SPY
|
0.18%
|
| MidCap
SPDRs |
MDY
|
0.25%
|
| Basic
Industries Select Sector SPDRs Fund |
XLB
|
0.65%
|
| Consumer
Services Select Sector SPDRs Fund |
XLV
|
0.65%
|
| Consumer
Staples Select Sector SPDRs Fund |
XLP
|
0.65%
|
| Cyclical/Transportation
Select Sector SPDRs Fund |
XLY
|
0.65%
|
| Energy
Select Sector SPDRs Fund |
XLE
|
0.65%
|
| Financial
Select Sector SPDRs Fund |
XLF
|
0.65%
|
| Industrial
Select Sector SPDRs Fund |
XLI
|
0.65%
|
| Technology
Select Sector SPDRs Fund |
XLK
|
0.65%
|
| Utilities
Select Sector SPDRs Fund |
XLU
|
0.65%
|
| Diamonds |
DIA
|
2.53%*
|
| WEBS
- Australia |
EWA
|
1.05%
|
| WEBS
- Austria |
EWO
|
1.41%
|
| WEBS
- Belgium |
EWK
|
1.04%
|
| WEBS
- Canada |
EWC
|
1.14%
|
| WEBS
- France |
EWQ
|
1.18%
|
| WEBS
- Germany |
EWG
|
1.08%
|
| WEBS
- Hong Kong |
EWH
|
1.09%
|
| WEBS
- Italy |
EWI
|
1.02%
|
| WEBS
- Japan |
EWJ
|
1.04%
|
| WEBS
- Malaysia (Free) |
EWM
|
1.09%
|
| WEBS
- Mexico (Free) |
EWW
|
1.34%
|
| WEBS
- Netherlands |
EWN
|
1.12%
|
| WEBS
- Singapore (Free) |
EWS
|
1.08%
|
| WEBS
- Spain |
EWP
|
1.11%
|
| WEBS
- Sweden |
EWD
|
1.17%
|
| WEBS
- Switzerland |
EWL
|
1.15%
|
| WEBS
- United Kingdom |
EWU
|
1.03%
|
* 0.18% after expense reimbursement by fund manager.
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