Passive stock and bond ETFs charge a management fee which is quoted on their website. Are there hidden charges on top of this standard management fee that is not transparent? For example, are brokerage transaction fees charged to the clients?

I was horrified to learn that hedge fund managers practise this kind of practice of charging extra fees on top of their hefty 2 and 20 fees. I am wondering if their passive counterparts such as ETFs and mutual funds do the same thing.

http://www.reuters.com/article/us-hedgefunds-passthrough-insight-idUSKBN1530JL http://pension360.org/elite-hedge-funds-shafting-clients-on-fees/ http://www.chicagobusiness.com/article/20170310/ISSUE01/170319976/citadel-skirts-hedge-fund-industry-upheaval

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Brokers will have transaction fees in addition to the find management fees, but they should be very transparent. Brokering is a very competitive business. Any broker that added hidden fees to their transactions would lose customers very quickly to other brokers than can offer the same services.

Hedge funds are a very different animal, with less regulation, less transparency, and less competition. Their fees are tolerated because the leveraged returns are usually much higher. When times are bad, though, those fees might drive investors elsewhere.

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