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Fund Expense Ratios Continue to Fall

This is the second year in a row of big fee cuts.

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The following is an excerpt from the April 2006 issue of Morningstar FundInvestor. Each month we deliver cutting-edge research that you can turn into great investment ideas. Clickherefor details on subscriptions.

Good news. The typical investor paid less in percentage terms for fund management in 2005 than in 2004. That's two years in a row that expense ratios have come down.

In most asset classes, the asset-weighted expense ratio came down 4 or 5 basis points. For example, the typical retail investor paid 0.93% in expenses for a U.S.-stock fund in 2005 compared with 0.99% in 2004, excluding institutional share classes. Expenses for the typical investor in an international-stock fund fell from 1.17% to 1.10%.

Russel Kinnel does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.