The cost-cutting trend among fund providers has been heating up. Last year, Fidelity Investments delivered a bombshell, introducing a zero-fee lineup of mutual funds and fueling speculation that a no-fee ETF offering would be around the corner.
According to XTF data, there are 2,248 U.S.-listed exchange traded products on the market with an average 0.58% expense ratio. The cheapest plain vanilla, beta index ETF comes with a 0.03% expense ratio.
Nevertheless, while there have been robust demand for cheap fund options, there is also a rising number of investors whom are willing to pay up for index strategies that try to diminish risk and enhance returns, such as smart beta or factor-based ETFs.
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