Why Some Already High-Cost Funds Are Looking Even Pricier
With average fees falling, more funds should cut theirs, but too often they aren't.
Fund Spy
My colleague Patricia Oey wrote a Fund Spy in May that summarized the latest Morningstar fee study for U.S. open-end mutual funds and exchange-traded funds. Two conclusions from the study should jump out at fund company executives.
First, the weighted-average fee that investors pay continues to fall, from 0.65% in 2013 to 0.57% in 2016. Second, investors continue to pull money from expensive funds (typically actively managed) and plow it into the cheapest funds, which are often passively managed. But even the weighted-average fee for active U.S. equity funds dropped to 0.77% from 0.83% during the same stretch.
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Kevin McDevitt does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.