Unit bid-ask spread
The difference between the best buying and selling price of a fund unit on the exchange: a standing cost of entry and exit that appears in none of the fund's stated fees.
How to read the number
It is built from the spreads of the underlying assets plus payment for the risk taken by whoever posts the quotes, which is why it is narrow for a fund on a liquid index and visibly wider for one on rarely traded names.
When the metric lies
It widens precisely when the trade is urgent. Over a short holding period the two spreads together can exceed the management company's annual fee.
Also known as: spread on the fund unit