Recent Report Shows Mutual Fund Fees Have Declined

Many 401(k) plans use mutual funds as investment options for participants. A recent report by ICI, “Trends in the Expenses and Fees of Mutual Funds, 2013” states that mutual fund expenses, including target date funds, have declined. The report states:

“Expense ratios of equity funds declined in 2013 as a result of lower expense ratios of individual funds, economies of scale gained through asset growth, increased demand for index funds, and a continuing shift by investors in both actively managed and index funds toward lower-cost funds. Expense ratios of bond funds were unchanged in 2013. Strong asset growth and competitive pressures, fueled by individuals saving for retirement and new target date fund entrants, has put downward pressure on target date mutual fund expenses. Expenses on funds nearing their target date are especially low, due primarily to their greater allocation to fixed-income securities.”

For more information, click here.