According to recent data, expense ratios for exchange-traded funds (excluding Merrill Lynch HOLDRs) edged upward during the middle of the first quarter, while the number of ETFs available exploded from 349 to 407 and the category as a whole approached the $600 billion AUM milestone.
The number of sector-based ETFs jumped from 64 to 127 over the past year. The expense ratio average for this group crept from 0.47 percent to 0.48 percent. In late January, New York City-based XShares Advisors introduced five niche healthcare funds with ratios of 0.75 percent.
The specialty group had the highest average expenses (0.91 percent) among all ETF categories. The group is dominated by ProShares, which recently launched 22 ETFs that offer leveraged long and short exposure to various Dow Jones U.S. sectors and carry expense ratios of 0.95 percent.