5
$\begingroup$

When does an Exchange Traded Fund (ETF) take out expenses (for example 0,3% on a yearly basis)? Does it happen daily, or once yearly or according to some other scheme? Where does it take them from?

$\endgroup$
6
$\begingroup$

In general, it depends on the particular ETF, and should be checked in the prospectus, but one standard way (e.g. SPY) is to do it on a daily basis based on NAV published after the close. E.g. NAV per share = X$, so the expenses taken out would be X*0.03/(100*252). Again usually ETF's have cash component (with aggregated dividends etc), so there's no problem with taking out the expenses.

$\endgroup$

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.