Research Library
Average Fund Costs Continued to Decline in 2015, But Investors Are Not Necessarily Paying Less
By Patricia Oey | 26 April 2016
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.
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