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Mark Gilbert

Fate Worse Than Zero Finally Arrives in Fund Land

The trend for lower asset management fees is relentless. Witness the SEC approval for an exchange-traded fund that pays you to invest.

Negative fees? Yes, please.

Negative fees? Yes, please.

Photographer: Jeenah Moon/Bloomberg

The trend that’s been driving fees in the world of asset management relentlessly lower has finally reached its (il)logical conclusion. The Securities and Exchange Commission has just approved an exchange-traded fund with negative fees. It’s further evidence, if any were needed, that the rush to the cheap seats is unlikely to halt anytime soon — and that fund managers need to continue adjusting to their straitened circumstances.

New York-based Salt Financial will launch its Salt Low truBeta ETF by paying investors 50 cents for every $1,000 invested until the fund reaches $100 million — which the firm says is the minimum size to get listed on brokerage and advisory platforms — at which point the fee reverts to $2.90.