ETFs Have Fees And Why It Doesn't Matter

Tue, Mar 24, 2020 at 11:36AM

ETFs Have Fees And Why It Doesn't Matter

ETF's has fees and why it doesn't matter.

All exchange traded funds (ETF) has an expense ratio. This expense ratio is the biggest criticism levied against the funds. The argument goes that expense ratios can eat into your profits. In reality, they don’t. Here’s why.


Say I invested $100 dollars in fund X. After a year, let’s say my $100 dollars is worth $105. I made a 5% gain. People will argue that you would have made more if the fund didn't have an expense ratio. But wait a minute – that’s all hypothetical.


I invested in something and my investment grew by 5%. The expense ratio is nothing more but cost of doing business. If I invested in stocks that mirror the fund, there is a possibility I would not get the same return because of allocation.

If a fund is invested in 10 stocks, it doesn't mean those 10 stocks are equal weight. People invest in ETFs because they have massive data to corroborate their returns. You can formulate an educated opinion on what ETFs to invest in. Unlike stocks, ETFs can be the easiest way to diversify a portfolio.[1] Their expense ratio, or cost of doing business, is worth it.

The trick to wealth growth is to be diversified and forget about it. Have dividends reinvested, add money to your portfolio when you can, and just forget about it. [2]

That's why most of our Motifs use ETFs, with a proven track record with good data to research. All we do is sit back and watch our wealth grow over time – the ultimate point of investing.

Here at Welch Tribune, we managed to create a Motif that will have you diversified and pays a dividend. Minimum investment is subject to change. However, you can just sit back and watch your wealth grow. We do all the work. You have complete control over your money. When we re-balance any of our motifs, you get a notification by email or on your phone. What are you waiting for?

Hit the invest button and let's make some money together. Diversification is the name of the game!



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[1]

    https://www.forbes.com/sites/greatspeculations/2010/11/05/seven-reasons-etfs-are-better-than-stocks/#582db01736bd

[2]

    https://qz.com/1356817/investors-with-more-diverse-portfolios-build-more-wealth-over-time/


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