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Fund Spy

Investors Experience Higher and Rising Fees for Liquid Alternative Funds

Bucking the trend observed in other asset classes.

Investors, on average, continue to pay significantly higher fees for alternative mutual funds. 

In 2016, investors paid an asset-weighted average of 1.34% for alternative mutual funds (which includes open-end funds and exchange-traded funds), which was significantly higher than the asset-weighted average of 0.72% for balanced funds, 0.50% for U.S. equity funds, and 0.48% for taxable-bond funds (see Exhibit 1). Among just actively managed funds, fees paid for alternative funds were still about double that of other fund categories.