The Year Ahead/Finance
As ETFs Get Cheaper, Wall Street Looks for Ways to Charge More
Complex strategies come with higher fees.
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Investors love exchange-traded funds because they’re simple and cheap. With some index funds now charging zero fees, it’s getting harder for asset managers to make money selling investors the basics. Watch ETFs get more complicated.
Some ETFs have a storytelling hook, such as the rise of self-driving cars, vegan foods, or digital banking. State Street Corp. has started an ETF that buys companies involved in sea or space exploration. Goldman Sachs Group Inc. has a “human evolution” fund in the works to invest in genomics, life extension, and robotic surgery. Assets in theme funds have almost doubled over the past 18 months, to more than $20 billion.