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J.L.Louis
J.L.Louis
14:29
Quick question guys. How do ETF get their fees. For example, and ETF Stock costs $100, and their fee is 1%. How do they take that 1%? If I sell the ETF Stock later for $110, do I only get $108.9? I would think that I would get the full value of the stock. Is that wrong?
 
1 hour later…
Joe
Joe
15:42
Bang. Nothing I like more than casting the last spam flag on a post.
Well, nothing I like more posting on the internet, anyway.
@J.L.Louis ETF takes it out of their earnings, basically. It's reflected in the ETF price - so if it costs $100, and then later you sell it for $110, without their costs it would've actually sold for $111.10.
J.L.Louis
J.L.Louis
16:04
That makes sense. So when I'm buying an $100 ETF share, I'm actually buying an ~$99 actual value share but with the fee included... right?
 
6 hours later…
Joe
Joe
22:03
@J.L.Louis Not exactly. The underlying security is still $100; if you bought, waited ten seconds, turned around and sold, then you would still get $100 back (minus your commissions if any, which are not considered part of the ETF fees).
It's more like a tax on earnings.
(though it's still there if it loses money)
so I suppose it's just a tax on ... stuff
I think of it as basically the same as I think of inflation
"every year, the money in my pocket is worth 1.5% less or so"
I get more of it, so my pocket doesn't actually have less in it
but it's still going away
ETF is the same - an ETF with 1% fees (which are criminal)
just ... devalues by 1% each year
hopefully it also appreciates
so you have a "pull" down on the chart by 1% and a "push" up on the chart by 8% or whatever market average is

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