Although
ETFs
aren't actively managed, they do charge operating fees, which are listed in each ETF
prospectus
as the fund's
expense ratio,
which expresses the cost of owning a fund as a percentage of the account value. For example, if a fund's annual expense ratio is 0.9% and you've invested $10,000, the fee will be $90 to cover your share of the cost of managing the ETF.
The fees vary on different ETFs and from provider to provider, as well as on the type of index the fund tracks. You can ask your
broker
to find those comparative costs for you or research them on financial Web sites, including the sites of the financial services firms that sponsor ETFs.
On average, the fees are considerably less than those of actively managed mutual funds, and are usually lower than the fees charged by
index mutual funds.
It's important to remember, though, that you will usually pay a brokerage commission to trade shares of an ETF. The costs of trading will depend on where you have an account and how frequently you buy and sell.
