Ben Fulton, head of global product development at Invesco PowerShares, said future expenses will depend on performance and complexity. “If a product can deliver excess performance it won’t surprise me, especially if you get ones looking like hedge funds, to see ETFs with expenses at 100 basis points,” said Fulton. “It has to be based on performance and managerial skills.” But Jill Iacono, v.p. at State Street Global Advisors, cautioned that ETF sponsors must keep expenses lower than mutual funds as they develop more complex offerings because lower expenses have been key to the success of ETFs.
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