Mar 30, 2020 - Economy & Business

The investment fee fall continues

Data: Investment Company Institute; Chart: Axios Visuals
Data: Investment Company Institute; Chart: Axios Visuals

As the popularity of passive investment vehicles has grown, money managers have consistently reduced their fees, particularly in stock funds and hybrid funds.

Driving the news: The cost of investing in equity and hybrid mutual funds through 401(k) plans fell again in 2018, a new report from the Investment Company Institute shows.

  • Despite the growth of ETFs, which still broadly have lower costs, mutual funds still represent the majority of assets held in 401(k) plans, ICI senior director of retirement and investor research Sarah Holden notes in a statement.

Between the lines: "Hybrid funds contain the bulk of 'alternative strategies' funds, which had a lot of demand between 2009 and 2013, and which generally have higher expense ratios," ICI associate economist James Duvall tells Axios in an email.

  • "These funds attracted $68 billion in net inflows, helping to boost their total net assets from $29 billion to $110 billion," during that four-year stretch.
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