ETF Expense Ratios and Performance Analysis

While lower expense ratios are generally beneficial, they only accounted for 5% of the performance variance in US large cap value ETFs over the past year. Investors should prioritize understanding an ETF's index methodology and concentration over its fee structure.

Key Takeaways

• 1.Expense ratios explained only 5% of the performance differences among US large cap value ETFs over the past year.
• 2.Top-performing ETFs often have expense ratios higher than the peer group average, suggesting fee levels are a poor predictor of success.
• 3.ETF selection should focus on index methodology, security weighting, and concentration rather than fees alone.

Table of Contents

• ETF expense ratios don't tell the whole story
• Global asset class preferences definitions
• Appendix
• Risk information
• Generic investment research – Risk information

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