Feeling the pain from investment fees
While mutual fund expenses have fallen, analysts say the fees are still taking too much out of investors' returns
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MUTUAL fund expenses can take a big bite out of shareholders' returns. That bite, on average, is shrinking, but academic and industry experts say it could - even should - be diminishing faster: Plenty of investment companies still charge a lot, and many consumers still opt for pricey funds.
Morningstar, the investment research company, and the Investment Company Institute, an industry group, both track mutual fund expenses. Their data, while differing slightly, tells the same tale: Investing in mutual funds is getting cheaper. And that means many investors can keep more of their return dollars.
"The only thing I'm sure about in investing is the lower the fee I pay, the more there's going to be for me," said Burton Malkiel, a professor emeritus of economics at Princeton University and the author of the investment primer A Random Walk Down Wall Street. "Fees have come down, on average, because fees for index funds are so much lower than active funds, and people have moved to them."
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