The Intangible Costs of ETF Ownership
Costs don't stop at the expense ratio.
In the investment process, once a high-level investment thesis or allocation decision has been made, the question shifts to how one can best gain exposure. While there are certainly a number of considerations, chief among them is cost.
This shouldn't come as a surprise. For years, cost of access has been a paramount concern. We can trace the trend all the way back to 1975, when, in founding The Vanguard Group, Jack Bogle built an investing empire on the back of low-cost investing. Even our research here at Morningstar has reinforced the idea that costs make a difference. We've shown that over the long term cost is an excellent predictor of relative performance; that funds with lower fees tend to outperform peer offerings.
Abraham S.H. Bailin does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.