Do ETF Fees Come Out Automatically?
Yes. ETF fees are deducted automatically inside the fund. You never get a separate bill, and you usually don’t see a line item on your statement — the impact shows up in the fund’s day-to-day price and its reported returns.
How ETF Fees Are Charged
ETFs charge an annual fee called the MER (management expense ratio). It covers the cost of running the fund: administration, index licensing, trading costs inside the fund, and the provider’s profit margin.
The MER is applied to the total assets in the fund, usually on a daily basis. Each day, a tiny portion of the fee is reflected in the fund’s net asset value (NAV). Over the course of the year, the total equals the MER percentage.
You Never Write a Cheque for ETF Fees
With ETFs, you do not pay fees the way you pay a subscription or a bill. There is no monthly withdrawal from your bank account labelled “ETF fee.” Instead:
- The fund collects fees from its own assets.
- Those fees reduce the fund’s total value slightly.
- The share price and performance figures you see are already after fees.
This is why many investors are surprised by how ETF fees work. They are invisible in day-to-day activity — but they still matter over long periods.
Where You Can See the Fee
You usually will not see a separate “fee line” on your brokerage statement for ETF MERs. To find the fee:
- Look up the ETF’s fact sheet or prospectus.
- Find the MER or “management fee” section.
- Use the ticker in your brokerage to confirm you have the correct fund.
Our guide ETF Expense Ratios and Fees walks through a sample fact sheet and shows you exactly where to look.
Why Automatic Fees Still Matter
The fact that fees come out automatically does not make them harmless. Over decades, even small differences in MER add up. A 0.80% fee versus a 0.10% fee can mean a noticeably smaller ending portfolio if returns are similar.
This is why many investors focus on low-cost ETFs for the core of their portfolios. You still get diversification and market exposure, but you keep more of the return.
FAQs
- Why don’t I see ETF fees on my statement?
- Because they are deducted inside the fund. Your statement shows your share price and market value, which already reflect the fee.
- Do ETF fees get taken out of my dividends?
- Fees are covered from the fund’s assets as a whole, not just from dividends. In practice, this means the net asset value you see already includes the effect of fees.
- Where should I go next?
- Read What Is an ETF MER? and Are ETF Fees Worth It? to understand both the mechanics and the trade-offs.