There’s a Dark Side to Zero-Cost Investing You Can’t Ignore
- Funds that charge nothing may come with unappreciated risks
- But an asset-management fee war means trend is here to stay
Photographer: Dario Pignatelli/Bloomberg
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If something sounds too good to be true, it probably is.
There’s a dark side to the wave of cost cutting that’s swept through the exchange-traded fund industry over the last 12 months. While every mom and pop in America can now pay nothing to buy an ETF through their favorite broker, and an extra nothing to cover its annual management fee, concern is mounting that there are catches to this bargain that could surprise investors.