We have a question for all the big fund managers who boast about no fees for their ETFs.
Q: Who in the world believes that Wall Street works for free?
Crickets…
And that’s because it seems like everyone and their brother, who manages money, is claiming to have ETFs with “No Fees?”
In Case You Missed it – not that long ago – Fidelity proclaimed to be the first investment firm to offer a NO FEE INDEX ETF. (Exchange Traded Fund).
No Fee? LOL!
Who are they kidding?
No one on Wall Street works for free.
Numerous times before we’ve written about what we see as hazards to owning ETFs Vs Stocks (HERE).
You might say we’re kinda biased. But that’s okay. We give you plenty of evidence to back it up. (Click the link and see for yourself).
No Fees?
Let’s just say that we’re very skeptical when it comes to behemoth firms like Fidelity claiming to give you something for nothing.
In the good ole days when ETFs were starting, it wasn’t unusual for them to have a fee ranging between 1-1.75% (with other trading fees well disguised in their Prospectus).
However, as they gained popularity, the competition leveled the playing field and managers were forced to cut their fees to just under 1%…then 0.5%…then 0.35%.
And now 0%?
Just for kicks, I’m gonna wait until they offer a negative fee ETF before I get on-board. (A negative fee ETF means they pay you to buy their fund).
Seriously though, we have a few questions for Fidelity or Vanguard, or Blackrock, etc., about $0.00 fees for funds:
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Is it possible your $0.00 fee ETF only covers stocks that you’re trying to sell from another one of your internal portfolios?
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Is this fee-less ETF a sign you’re out of the market?
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Or is it a sign you’re getting out of the market?
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Or is it possible that this special ETF is only available for current accounts that are already paying a monthly management fee?
Enquiring minds want to know.
Honestly, we don’t expect to get a straight answer because Fidelity is a marketing master.
They also know that in a crashing market they (Along with Vanguard, and Blackrock) are too big to sell their positions without creating an even bigger crash.
Read about how you CAN’T get out when things get ugly in a Free Report titled “Size Matters When You Are Running for the Exits” (HERE).
