Exchange traded funds (ETFs) have some of the lowest expense ratios in the market. The low costs can be attributed to their passive indexing methodologies, but different indices will create varying cost structures.

At the end of October, State Street Global Advisors switched the underlying benchmark for its Bank ETF to Standard & Poor’s, an equal-weighted index, from Keefe, Bruyette and Woods, a market-cap weighted index, reports Ari I. Weinberg for The Wall Street Journal. Consequently, the re-dubbed SPDR S&P Bank ETF (NYSEArca: KBE) changed its holdings and expense ratio.

Invesco PowerShares recently drafted four new ETFs based on the discarded KBW financial indices, offering zero management fees until February next year in an attempt to carve out its piece of the market share. [Financial ETFs Lead Market Decline with Nearly 5% Loss]

Last week, Russell Investments also reduced fees on 13 volatility, beta and momentum ETFs on the heels of similar actions from rivals, such as Direxion.

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.