U.S. Mutual Fund Fees: Long-Run Declines and Investor Flows
Summary
This report reviews U.S. mutual fund and ETF expense ratios through 2017, comparing equity, balanced, bond, money market, target date, active, and index products. It describes broad fee declines over time and relates them to investor demand for low cost funds, asset growth, scale, and competition. Money market fees rose in 2017 as higher short term rates allowed advisers to restore some previously waived charges; target date and fund of funds fees also declined.
The report also discusses flows by fee level and sales structure: money mainly went to lower cost funds, while no load funds gained assets and load funds saw outflows. These are descriptive historical observations rather than a tested trading signal or causal study. Some figures in the supplied text are missing, and the report cautions that U.S. market structures differ from China's and that past trends may not continue.
Key ideas
- Mutual fund expense ratios generally declined across major U.S. fund categories over the period covered.
- Money market fund fees rose in 2017 as short term rates increased and some fee waivers ended.
- Scale and competition were associated with lower ETF expense ratios.
- Investor flows tended to favor lower cost funds and no load share classes.
- Historical fee and flow patterns describe past conditions and do not guarantee future trends.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.