Free ETFs Don’t Work


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Recently, PowerShares tried to penetrate a crowded fund space by temporarily waiving all management fees for its KBW series of financial sector ETFs, launched in November.

The result? Although an expense ratio of zero was eye-catching at first, the effect wore off quickly.

These funds are:

  • PowerShares KBW Insurance Portfolio (NYSEArca:KBWI)
  • PowerShares KBW Capital Markets Portfolio (NYSEArca:KBWC)
  • PowerShares KBW Regional Bank (NYSEArca:KBWR)
  • PowerShares KBW Bank Portfolio (NYSEArca:KBWB)

On Feb. 1, PowerShares ended the freebie and raised fees on each of the four ETFs to 35 bps, at which point, assets in three of the four funds collapsed. That happened even though the new fees were on par with those of competitors.

KBW Fund Assets Don't forget to check's ETF Data section.

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This article appears in: Investing , ETFs
More Headlines for: KBWB , KBWC , KBWI , KBWR , SCHE

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