[fiveFeet]

The cost to run an etf does not (or at least should not) increase with Assets Under Management (AUM). So if anything the providers should be charging a fixed fee for the whole index fund instead of charging based on the AUM.

[slivym]

There's a cost associated with buying and selling the underlying equities which is proportional to AUM.

[fiveFeet]

Hmmm... why? What is so different between trading 100 shares vs 1,000 shares vs 100,000 shares? Trading is automated enough that a linear cost is not justified.

[jonknee]

Is there? For large index ETFs that is surely done by broker dealers arbitraging miniscule pricing differences between the underlying and ETF price.