Negative Fee ETF Gets Acquired By Pacer
Salt Financial tried to make a big splash in the ETF marketplace by introducing the first ever fund with a NEGATIVE expense ratio. It promised a -0.05% expense ratio on the first $100 million of assets. That means investors would get paid $5 for every $10,000 invested.
Despite the financial incentive, the idea never caught on. The Salt Low truBeta U.S. Market ETF (LSLT) has just $9 million in assets. Now, it and its sister fund, the Salt High truBeta U.S. Market ETF (SLT), are being acquired by Pacer ETFs.
Pacer is known for its cash flow-focused ETFs and its TrendPilot series designed to play the 200-day moving average.
No major comments yet from Pacer on why they targeted the Salt ETFs, but one thing we do know is that the negative fee gimmick is going away. Not only going away, but the expense ratio is going way up. Under normal circumstances, SLT and LSLT would have charged 0.29%. Pacer is going to up it to 0.60%.
Pacer has done a lot of juggling with its ETF lineup over the past year. A year ago, they expanded their TrendPilot lineup to include international and "cash cows" funds, while adding a bond TrendPilot fund in October. They acquired the American Energy Independence ETF in December and a China-focused fund in January.
Pacer downsized their lineup just recently with the closure of the Pacer Benchmark Retail Real Estate SCTR ETF (RTL).
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