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Fund Expense Ratios Plateau After Years of Cuts

But one asset class saw a big drop.

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This is an excerpt from the April issue of Morningstar FundInvestor.Click hereto subscribe so you can read the whole article and a lot more.

Uh-oh. After years of falling expense ratios, the trend is starting to reverse and we might even see them rise a bit in the coming years. That's bad news because we've found that costs are the best predictors of future returns.

From 2003 through 2006, the average mutual fund investor's expense ratio bill fell from 1.00% to 0.90%. That's a huge savings and was a long overdue sharing of the economies of scale that the advisors and the fund industry had been keeping to themselves.

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