Average Fund Costs Continue to Decline in 2015
But investors are not necessarily paying less.
The following is an excerpt from Morningstar's most recent study on fund fees.
Our study of U.S. open-end mutual funds and exchange-traded funds finds that, on average, investors paid lower fund expenses in 2015 than ever before. The asset-weighted average expense ratio across funds (excluding money market funds and funds of funds) was 0.61% in 2015, down from 0.64% in 2014 and 0.73% five years ago. This decline stems from investor demand for cheaper passive funds (index funds and ETFs) and strong flows into institutional share classes, which carry lower fees. Vanguard also contributed to average fee declines, as its low-cost passive funds continue to attract large flows.