Will original shareholders get shortchanged on fees?
Original shareholders may lose out on the upfront fees they paid to gain membership to the mutual fund since the ETF shareholders will only have to pay for commission. However, ETFs are cheaper than most mutual funds, on average.
Will there be tax or regulatory changes?
Although mutual funds and ETFs are similarly regulated, tax liability changes will need to be evaluated on a case-by-case basis.
Will the management change?
Technically, yes, the management can change. But in practice, this is unlikely to happen since firms are not converting funds to change strategies.
For more stories on ETFs, visit our ETF 101 category.
Sumin Kim contributed to this article.