Fees for Mutual funds and ETFs Fall Toward Zero

Fees for Mutual funds and ETFs Fall Toward Zero

An article on The Wall Street Journey reports that the cost of investing is falling toward zero for mutual funs and ETFs. This is an excellent news for common investors everywhere. However, “some money managers that get much of their revenue from actively managed funds are fighting back, partly by getting more vocal about the potential risks of index investing. They say the strategy forces investors into risky bonds or pricey stocks just because they are part of a benchmark.” Despite their talks, indexed funds consistently out perform actively managed funds. That’s not good news for fund managers. They still don’t accept their fate yet in order to get some revenue by being a market-leader in indexed mutual offerings and by profiting more so due to high volume. The tough time is ahead for actively money manager as fee cutting pressure remains relentless while Vanguard automatically lowers fees as its funds grow. (wsj.com)

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