common cost of investing in an ETF is the expense ratio. There are hundreds of ETFs trading in the market, and the expense ratio varies from one to another. A smaller, more niche fund tends to have a higher expense ratio due to lower asset levels, which in turn, is drawing from a smaller pool of capital to pay the expenses. As a fund grows, or the asset level gets higher, the expense ratio may become lower.

The indexed approach of most ETFs also means lower fees. [ ETF Fees: How Low Can They Go? ]

Since ETFs are bought and sold like stocks, broker commissions are another factor to consider.

Many providers are offering fee trades for investors that set up an in-house brokerage account. This helps alleviate any costs associated with trading, so long as the trades are done between the providers chosen ETFs. [ Brokers Offer Commission-Free ETF Trades ]

Other factors that impact an ETF’s operating expenses include taxes, legal expenses, accounting and record keeping.

Tisha Guerrero contributed to this article.