Low fees are a big selling point of exchange-traded funds, but beware: They may be higher than they appear, especially in the growing world of ETFs that buy other ETFs instead of the actual stocks, commodities or futures.
Look no further than the newly launched (as in last week) Teucrium Agricultural Fund, better known by its symbol — the TAGS . The fund invests equally in Teucrium’s corn, soybean, wheat and sugar funds.
According to Teucrium’s website, the TAGS has an expense ratio of 0.32 percent.
However, a deeper dive into the prospectus:
Each Underlying Fund pays management fees at an annual rate of 1.00 percent of its average net assets, brokerage charges, over-the-counter spreads and various other expenses of its ongoing operations (e.g., fees of the Administrator, Trustee and Distributor). Accordingly, the Fund has a total estimated expense ratio, including its proportionate share of Underlying Fund expenses, of approximately 1.6 percent of net assets (not including the transaction fees paid by Authorized Purchaser when purchasing or redeeming Creation Baskets).Page 1 of 3 | Next Page