Spreads in ETF transactions

Is there a buy/sell spread for purchases and sales of ETFs?

Hi there,

Shares in exchange traded funds (ETFs) - like shares in most mutual funds - are normally priced above their immediate value. When funds sell shares, they often charge a markup on the price which they would pay to repurchase the shares. This difference between the purchase price and the selling price makes up a spread, which adds an additional "cost" that encourages shareholders to hold their shares until their value increases - making up for the spread.

As a general rule, the more liquid the ETF, the smaller the buy/sell spread.

Best regards from Moneyguru

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