One of the most interesting etfs is PWC which charges 60bp.
It skirts the archaic SEC prohibition of an etf (non-closed)
from being actively managed,by following an index that itself
is somewhat actively managed. It usually beats the sp500,
although it's sister etf PWO seems to match, not beat nasdaq.

As for index mutual funds, Vanguard is no longer the low cost
king for at least the most basic indexes. Fidelity spartan funds
and Etrade native funds now halve V* costs at 10bp. V*'s
decreasing user friendliness and increasing fees just make
less and less sense, and lately hear rumours they'll chop fees.

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pmb[at]his.com (Paul Michael Brown) writes:

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Which ETFs are those? SPY, for instance, only charges 10bp.
Since it was mentioned in the subject line, DIA charges 18bp.
IWM charges 20bp and IWN charges 25bp. IWV charges 20bp.
IYY is 20bp. I wouldn't personally use it, but QQQ is 20bp.

That covers most of the major indexes and (a) none is close to
40bp, and (b) they are comparable and in some cases beat Vanguard.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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Defining "risk" broadly, I don't like exchange-traded funds (ETFs) because
of the high transaction costs. First, you have to pay a brokerage
commission every time you buy shares in the ETF. Suppose you pay a $10
commission on a $500 purchase. That's two percent right off the top. You
can buy shares in a mutual fund that tracks the same index for zero
upfront fee. Also, the annual fees for most ETFs I've looked at average
about 40 basis points per year. Again, you can do better if you purchase
shares in an index fund. At Vanguard, for example, I pay only about 20
basis points per year on my S&P 500 index fund. Granted, these amounts
don't sound like much. But over time the increased transaction costs of
ETFs will lower your total return.

In summary, for most buy-and-hold retail investors who are dollar cost
averaging into an investment in equities, ETFs just don't make sense.
These people will almost always be better off purchasing shares in an
index fund.

Jimmy Smith wrote:
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Jimmy,
You should download & read the prospectus for each if you're concerned
about that kind of thing. There are links for both from www.amex.com in
the ETF section. In general I think these come with very minor
management/structural risk factors. There are some risks associated with
the "creation unit" structure but they're probably more of interest for
someone investing a very large amount of money (like a pension fund
manager).

-Tad

Are there other financial dangers beyond ordinary market risk when holding
SPDRs (SPY) or Diamonds (DIA)? I understand the price of the underlying
stocks can fall and as a result I could lose money, but are their other
risks specifically connected to the investment vehicle? For example, can
the SPY parent company fail and then my investment is destroyed? Can the
trust itself somehow screw up big time and my resulting lose has little or
nothing to do with market moves?

Jimmy