Most ETFs cost less than a typical mutual fund, but more to own than a stock.
2 main types of fees
- Trading commissions – Like a stock, you will usually pay a commission to the investment firm every time you buy or sell an ETF. ETFs may not be suitable if you’re planning to make frequent purchases or trade often.
- Management fees and operating expenses – Like a mutual fund, ETFs pay management fees and operating expenses. This is called the management expense ratio (or MER). MERs for index ETFs are usually much lower than those for actively managed funds. That’s because the fund manager doesn't have to do as much research into investments, or as much buying and selling of investments.
Before you invest, read the ETF's prospectus to understand the fees. You can compare fees and performance online at websites like Globefund