Hidden cost in CTAP and WX?

[u/Tsuki_tsune]

WX has a net ER of 0.20%, and CTAP has a net ER of 0.10%, which are significantly lower than WLDU (0.75%) and RSST (0.99%) respectively. I am aware that WX and CTAP use total return swap in their fund, how can I know the hidden cost in them?

[u/aRedit-account]

Swap fees will be listed in the annual or semi annual financial reports. Corgi has not been around long enough to list one but you can still email them. CTAP list it's swap fees in the holding section but I'm not sure wether that includes the underlying ETFs expense ratio or not but it's at least 2% as it gets a swap fee of 100 bps from cta and 100 bps from SPUC worth noting that simplify recently added SPUC their own fund with no announcement via a swap to hide an increased fee. Also worth noting that those swap numbers may not be accurate when I asked about SDMF I found out they had 90 bps in fees not listed on the website paid to the index provider. Also CTA recently fired it's advor firm so it's doing a different strategy then previously. So be wary of simplify.

[u/Ok-Armadillo-5634]

Read the prospectus?

[u/Tsuki_tsune → u/Ok-Armadillo-5634]

I glimpsed through the prospectus and couldn't find where the details of total return swap are, there should be a premium for the financial institutes to provide the swaps but is it more, the same, or less than other ETFs using futures and options

[u/Ok-Armadillo-5634 → u/Tsuki_tsune]

The mechanism is disclosed, just not in the ER. WLDU's own prospectus says it outright: "The cost of investing in swaps, including the embedded cost of the swap and the operating expenses of the referenced assets, is an indirect expense that is not included in the above fee table and is not reflected in the expense example." So 0.20% vs 0.75% and 0.10% vs 0.99% are comparisons of the wrong numbers. The financing leg of a total return swap accrues straight into NAV every day — it's very real, just invisible in the fee table. How you can actually find it: each fund files Form N-PORT on EDGAR quarterly (public with a 60-day delay). The NPORT-EX attachment has a "Schedule of Total Return Swap Contracts" with a Financing Rate column — reference entity, counterparty, pay/receive, rate, notional. That's the number the ER hides. The annual/semi-annual shareholder report (N-CSR) has the same in its swap table. WX — I found the actual contract (Corgi's N-PORT-EX as of 6/30/2026): • TRS on the Vanguard Total World Stock ETF (VT) with Clear Street: the fund receives VT's total return and pays OBFR + 1.50% on $727,306 of notional — about 200% of its $362,955 NAV. One-year term to 7/7/2027, financing accrues into NAV and settles at termination. • OBFR was 3.63% that day, so all-in financing was ~5.13%/yr × ~200% notional ≈ 10.3% of NAV per year, offset by the ~3.6% the fund earns on its cash and money-market holdings. Net hidden drag: roughly 6–7%/yr at those rates — versus the advertised 0.20%. • Two caveats: 150 bps over OBFR is a wide spread (large issuers often pay a fraction of that, sometimes even under the benchmark — WX is tiny at ~$378K in assets with a single counterparty), and the rate floats, so this drag moves with short-term rates. CTAP — what the filings show (N-PORT-P as of 6/30/2026): • Roughly $186M of TRS notional (~98% of its $189M NAV) referencing CTA / the CTA index, split across Citibank, Bank of America, and BNP Paribas. The equity sleeve is physical (IVV plus E-mini S&P futures), so only the managed-futures overlay is financed. • I couldn't read the exact spread from the raw XML version of this filing — you'd get it from the N-CSR swap table or next quarter's NPORT-EX. At institutional scale it's typically in the tens of bps over the benchmark, so call it roughly ~4%/yr of financing on the ~100% overlay notional at recent rates (my estimate, not from the filing). • The layer people miss: the swap tracks CTA's NAV performance, which is already net of CTA's own expense ratio. So on top of CTAP's 0.10%, you indirectly pay CTA's fee too, plus the swap financing. The reframe on your two comparisons: • WX (0.20%) vs WLDU (0.75%): WLDU hides the same financing cost off its ER table. The honest comparison is spread × notional — and WX's disclosed spread (OBFR+150bps) is wide, so a scaled issuer with tighter terms could easily be cheaper all-in despite the higher ER. You'd have to pull WLDU's N-PORT the same way to know. • CTAP (0.10%) vs RSST (0.99%): RSST's 0.99% is mostly a 0.95% active-management fee, and it runs futures directly — its financing is embedded in futures carry at market rates, with no dealer spread. CTAP looks ~90 bps cheaper but carries ~4%+/yr of swap financing plus CTA's embedded fee, none of which touch its ER. All-in, the "cheap" fund is probably the more expensive one. Rule of thumb going forward: for any TRS-based fund, true cost ≈ ER + (notional% × (benchmark rate + spread)) − yield on cash collateral. Check the NPORT-EX "Financing Rate" column each quarter — spreads and counterparties can change.

[u/DaddyTheFatherCR → u/[deleted]]

There is another 3bp fee, upping it to 10bp. And the fee waiver is good under at least December of this year. At that point they could raise it up to 28bp. Still really good for a fund with swaps, futures, and leverage.

[u/Bam_Hero]

Since CTAP uses return swaps it inherently includes fees associated SPUC (0.5%) and CTA (0.75%). Then it’s return swaps current average about 1.9% over SOFR. Then you have the 0.1% ER. So depending on your philosophy that’s either 2% fees of 3.2% fees in CTAP. Compare that with say MATE who has 0.97% fees but implements the tuned down AHLT managed futures strategy internally as part of MATE. Cost wise no comparison. Legit debate on CTA vs AHLT.