First came Fidelity offering no-fee mutual funds last August and September, then SoFi, which introduced a no-fee ETF in April, and now Salt Financial’s ETF that will not only waive its fees for a little more than a year but pay investors to own it.
Following approval by the Securities and Exchange Commission, the Salt Low truBeta U.S. Market ETF (LSLT), which launched in March, is waiving its 29 basis-point expense ratio and contributing five basis points, or $5 for every $10,000, from firm resources to the fund. The effect is a reduction in its expense ratio to -0.05%, which is essentially a payment to investors in the fund.
The negative fee arrangement will continue to stay in effect on the first $100 million in net assets until at least May 31, 2020.
Alfred Eskandar, co-founder and president of Salt Financial, says the two-year-old firm has adopted the new fee structure “for shelf space” on broker platforms.
“I have too many advisors who have tried to put money into my fund and couldn’t,” says Eskandar, noting that most broker platforms require $25 million, $50 million or $100 million in assets before adding new funds.