The Squeeze on Fund Expenses
Will it spread to financial-advisory fees?
The Race to the Bottom
On the front page of Wednesday's The Wall Street Journal: "Mutual-Fund Fees Tumble Toward Zero."
Well, sort of. More accurately, mutual fund investors' willingness to pay fees is tumbling toward zero. As a result, most existing funds have become dinosaurs. They do not and cannot sell new shares, unless they are one of the very few to post unusually strong returns. All the assets flow to the minority of existing funds that have low expense ratios (that is, index funds and institutional share classes), and to newly launched funds that sell on the cheap.