Personal Finance & Money Asked by B Chen on August 29, 2020
In the US, a high turnover rate of ETF underlying assets generally passes the cost to the investors who purchase those ETFs. Now multiple online traders such as Schwab and TD Ameritrade offer zero fee trading, does the ETF turnover rate still matter ?
does the ETF turnover rate still matter ?
Yes. ETFs are not "retail traders" but "institutional traders" and will have different fee structures. Plus they have implicit transaction costs when rebalancing by having to pay the bid price when selling and the ask price when buying (called "crossing the spread").
Answered by D Stanley on August 29, 2020
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