This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Mutual Fund Fees Declined In 2011, Studies Find


BOSTON (AP) â¿¿ Mutual fund fees fell slightly last year, driven in part by demand for low-cost funds.

That's good news for investors, because fees cut into fund investment performance year after year, whether the stock market climbs or falls. Although there's no controlling the market's direction, individuals can control how much they pay to invest.

The latest numbers are in separate reports issued Monday by researcher Morningstar Inc. and by the fund industry's trade organization, the Investment Company Institute.


Both reports examined average fund expense ratios charged in 2011. That's the ongoing expense that investors pay for operating costs, expressed as a percentage of a fund's assets. To calculate average expenses for thousands of funds, both Morningstar and ICI use a method called asset-weighting. That means that expenses at funds with more assets, and therefore more investors, count more toward the average than expenses at smaller funds.


The typical investor paid 0.75 percent last year, according to Morningstar, or $7.50 for every $1,000 invested. That's down from 0.77 percent in 2010. Morningstar's figure is the average for stock funds and bond funds, as well as funds investing in alternative assets such as precious metals and commodities.

Fees fell more sharply at stock funds than they did at bond funds, Morningstar said. U.S. stock funds charged an average 0.74 percent last year, while funds investing primarily in foreign stocks charged 0.93 percent. Taxable bond fund expenses averaged 0.63 percent, while municipal bond funds averaged 0.60 percent.

The ICI didn't calculate an average across all types of funds. The industry group said stock fund investors paid an average 0.79 percent last year, down from 0.83 percent in 2010. Bond fund investors paid 0.62 percent, down from 0.64 percent the previous year.

Fund companies' fee revenues decline when the stock market falls, because lower asset values result in lower fee collections. The market was essentially flat in 2011, and ICI said stock fund assets were stable, ending the year at about $5.2 trillion. Stock fund assets posted big increases in 2009 and 2010.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.99 0.00%
FB $102.01 0.00%
GOOG $682.40 0.00%
TSLA $151.04 0.00%
YHOO $27.04 0.00%


Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs