https://www.wsj.com/articles/zero-fee-etfs-or-even-negative-are-on-the-horizon-1517800320
For some reason, I can see the entire article on my mobile Firefox browser, but not on my desktop Firefox (even in private mode) or desktop MS Edge. Someone who has a WSJ account could help.
In summary (copied from my phone), the ETF industry grew at an average of more than $100 billion per quarter over the past two years, totaling about $3 trillion.
One of the founders of iShares was quoted: "There isn't a zero lower bound to expenses. A negative management fee is certainly conceivable."
WSJ estimates that it would take about another $900 billion (within the year) to push from 0.03 expense ratio to zero, or an increase in revenue generation from lending out shares to short sellers.
The funds can make money by charging lending fees, as well as on the collateral that borrowers have to post for the shares they short.
TL;DR: Increasing inflows into ETFs and charging short sellers fees could allow ETFs to have zero or negative expense ratios.
I've also read that M1 Finance makes money by charging short sellers fees in return for lending out shares.
EDIT: https://blogs.wsj.com/moneybeat/2016/10/07/the-etf-with-the-0-00-fee/
An ETF manager said there were lots of excess expenses that could still be cut out, and he would love it if someone showed up with a zero or negative expense ETF.
Submitted April 29, 2018 at 09:36PM by COMPUTER1313 https://ift.tt/2rb0ZRH
