Under The Hood Of FocusShares: Q&A With Kris Wallace & Erik Liik
23.05.12
ETF Database (ETFdb): A lot of investors are under the impression that all ETFs are equally cost efficient – or at least that they’re all pretty close. I’m guessing you might have a different take on that?
Kris Wallace (KW): We do actually; because FocusShares took cost efficiency to a new level. You didn’t think ETFs could go any lower and we determined that they could. We have two products that are at five basis points. We targeted all of our other products either to be the lowest or among the lowest in each of their product categories.
ETFdb: For a trader who is going to be in for a few minutes or a few days that may not make a big difference. But for long term, buy-and-holders, what Jack Bogle called the tyranny of compounded costs, can end up having a huge impact.
KW: Absolutely. If you do the math over the lifetime of your holdings, expenses can become material, especially if it’s a 30- or 40-year time horizon. It really does add up year after year, compounding those expenses.
Source: ETF Database