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To paraphrase the late great John Bogle, there are only two "free lunches" or "pure wins" in investing: One is diversification and the other is minimizing investment costs (fees). You really do come out ahead by choosing a lower-cost mutual fund or ETF. So why is this advantage not arbitraged away by the market, as your trading intuition suggests? Free ...


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No, they are not. The expense ratio is not an indispensable part of the assets held by the ETF, like an expense, faced by company and impacting its share price. An ETF provider is always ready to redeem or subscribe shares at the NAV price (subject to a fee and minimum volume), so that it is highly unusual that an ETF would deviate a lot from its NAV. Even ...


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