[dlubarov]

Wouldn't fees generally be more significant if holding over a significant time period? Like VOO's 17 bps would mean ~2% over 30 years. Not sure what the weighted average spread of broad index funds looks like, but I would have thought it's far lower.

I guess rebalancing also creates an ongoing spread-based cost, but it seems like that should be far more minor, at least for broad index funds with low-single-digit turnover.

[darkerside]

There's also time value of money. Paying upfront like this means that money can't be invested (by you), and you lose out on the money plus the return.

[dlubarov]

Wouldn't that be for fixed-dollar fees? I think here all the costs we're talking about are percentages.

I.e. ignoring taxes, the amount I theoretically expect to exit with should look like

    entry_cost * (return_rate * fee_rate)^T * exit_cost

Where return_rate might look like ~1.1, fee_rate might look like 0.9983 (17 bps), and entry_cost and exit_cost might look like half_spread/price (under some assumptions...).

So I think this comes down to whether T is large enough for that exponentiation to dominate the half-spreads.