From the Mutual Fund Informer’s blog:
Fees and expenses play important roles in reducing an investor’s overall returns. But recent research from the Investment Company Institute and Morningstar Inc. show that investors are continuing to pay less on average for their funds.
The Investment Company Institute recently published its “Trends in the Fees and Expenses of Mutual Funds” study for 2011, showing that the average expense ratio paid by equity fund investors was 0.79%, down from 0.83% in 2010. That’s a small change, but still pretty significant as part of a longer-term trend.
In research from Morningstar’s Russel Kinnel, the average expense ratio of all funds (bond and equity) fell from 0.77% last year to 0.75%. That’s a whopping 0.19% less than it was 10 years ago.
Are mutual fund investors getting smarter? Are fund companies listening to complaints of shareholders? According to Kinnel, it seems to be the case that investors are making smarter choices by looking for lower-cost funds, which is great news.
Remember, fees reduce returns, which is why it’s so important that investors need to pay particular attention to expense ratios and loads in their funds.
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