Fund Spy

Investors See Largest Ever Decline in Fund Fees

Patricia Oey

Investors paid lower fund expenses in 2017 than ever before. Our study of U.S. open-end mutual funds and exchange-traded funds found the asset-weighted average expense ratio across funds was 0.52% in 2017, an 8% decline from 2016. This is the largest year-over-year decline we have recorded since we began tracking the trend in asset-weighted average fees in 2000. Consequently, we estimate that investors saved roughly $4 billion in fund expenses last year (see Appendix for details). This fee decline is a big positive for investors because fees compound over time and diminish returns.

Exhibit 1 Asset-Weighted Average Fees for Funds Decline 8% in 2017