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Calculating ETF Costs

Calculating ETF Costs

The table below shows the one- and five-year costs for owning $10,000 of the PIMCO Total Return ETF (BOND), the company’s flagship fund. The table assumes a $7 charge to buy and sell the fund and a bid-ask spread of 0.02% (source: IndexUniverse, October 2012).

 

Annualized Cost to PIMCO Total Return ETF Investors

 

Cost

1 Year

5 Years

Expense Ratio

0.55%

0.55%

Bid-Ask Spread

0.02%

0.00%

Buy/Sell ($7 @)

0.14%

0.03%

Total (annual cost)

0.71%

0.58%

 
Charles Schwab has ETFs with an expense ratio of just 0.04% ($4 a year for a $1,000 investment). The next table shows the average bid-ask spreads by ETF category for September 2012 (source: IndexUniverse).
 

ETF Bid-Ask Spread

ETF Category

Spread

ETF Category

Spread

U.S. Fixed Income

0.22%

Foreign Bond

0.85%

U.S. Equity

0.25%

Currency

1.06%

Foreign Stock

0.61

Inverse

1.65

Alternatives

0.65%

Leveraged

2.31%

Commodities

0.79%

Average

0.92%

Asset Allocation

0.84%

Average

0.92%

 

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