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22

A negative transaction cost indicates that transacting has resulted in a net revenue rather than a net cost for the fund. This can happen for two main reasons:

  • The amount of money a fund obtains from its Swing Pricing mechanism offsets most or all of the transaction costs that the fund incurs.
  • If a stock is taking a number of hours to sell/buy, the price can rise/fall in the time between placing the order and execution, so it exceeds/falls below the original arrival price and therefore offsets other transaction costs.

If this happens to enough trades, an overall negative transaction cost can accrue.

23

So what is the case with this particular one? https://public.freetrade.io/costs_and_charges/IE00BG0J9Y53.html

24

Just ignore transaction costs. They’re murky and often irrelevant

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25

Whereas I :heart: transaction costs!

I simply can not get enough

A metric so complex in formation no one (literally no one) could reverse engineer it to prove or disprove it.

And, despite verbal agreements not to publish negative transaction costs anymore as they confuse investors, many managers still publish negative costs.

A regulation grounded in simple transparency has resulted in nothing being simple nor transparent

1 Like