Not surprisingly, Equity and Fixed income are the cheapest on a weighted average since they are the easiest asset classes to replicate. What stands out is that the Leverage and Volatility weighted averages are actually higher than the absolute average. This implies that investors are more interested in liquidity than expenses when it comes to trading vehicles.

Expense Ratio By Geographic Focus

Expense Ratio by Geographic Focus AVG ER Weighted

When evaluating ETF’s expense ratio by geography, we see again that the easiest asset classes to replicate are the least expensive, US ETFs in this case. There is an interesting phenomenon with Global ETFs where the average and weighted are quite similar, which is probably associated with the Global thematic ETFs.

Expense Ratio By Sector

Very surprising that people are over-spending for Thematic ETFs due to liquidity and their ability to capture trends. In terms of traditional sectors, it appears that the average expense ratio for Energy is the highest, but on a weighted basis, Utilities seem to offer the best bargain.

This article was written by Toroso Asset Management, a participant in the ETF Strategist Channel.

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