While lower costs may seem like an attractive deal, investors shouldn’t base their decisions solely on this one attribute. Scott Ebner, global head of product development at State Street Global Advisors, said that investors are considering liquidity, bid/ask spreads and commissions, along with expense ratios.
Van Eck will also begin restructuring six HOLDRs. However, due to the HOLDRs’ structure, capital gains or losses will be laid on investors, based on their original purchasing prices. [Van Eck, Merrill Lynch in Agreement Over HOLDRS]
For more information on ETFs, visit our ETF 101 category.
Max Chen contributed to this article.