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The cost of U.S. mutual funds and ETFs shrank last year by the second largest amount on record, saving investors $5.5 billion, according to a new study from Morningstar.

Expand chart
Data: Morningstar; Chart: Harry Stevens/Axios

The big picture: The price of investing has been falling precipitously since the creation of index funds, punctuated recently by negative-fee products that actually pay a small rebate for investing.

What they're saying: "As awareness grows around the importance of minimizing investment costs, we have seen a mass migration to low-cost funds and share classes," said Ben Johnson, Morningstar's director of ETF and passive strategies research.

Morningstar's study found that in 2018:

  • Investors are paying approximately half as much to own funds as they were in 2000, roughly 40% less than they did a decade ago and about 26% less than they did 5 years ago.
  • Fees have fallen significantly for both active funds and passive funds.

What to watch: Fees have fallen across the board, but investors are choosing the very cheapest options. The least expensive 20% of funds saw net inflows of $605 billion, with the remaining 80% of funds experiencing net outflows of $478 billion.

  • Of the $605 billion that flowed into the cheapest 20% of funds and share classes, 97% of net new money flowed into the least costly 10% of all funds.

Go deeper: Wall Street fund fees are dropping at an astonishing rate

Go deeper

Updated 3 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: WHO: AstraZeneca vaccine must be evaluated on "more than a press release."
  2. Politics: McConnell temporarily halts in-person lunches for GOP caucus.
  3. Economy: Safety nets to disappear in DecemberAmazon hires 1,400 workers a day throughout pandemic.
  4. Education: U.S. public school enrollment drops as pandemic persists.
  5. Cities: Surge in cases forces San Francisco to impose curfew — Los Angeles County issues stay-at-home order, limits gatherings.
  6. Sports: NFL bans in-person team activities Monday, Tuesday due to COVID-19 surge — NBA announces new coronavirus protocols.
  7. World: London police arrest more than 150 during anti-lockdown protests — Thailand, Philippines sign deal with AstraZeneca for vaccine.

Tony Hsieh, longtime Zappos CEO, dies at 46

Tony Hsieh. Photo: FilmMagic/FilmMagic

Tony Hsieh, the longtime ex-chief executive of Zappos, died on Friday after being injured in a house fire, his lawyer told the Las Vegas Review-Journal. He was 46.

The big picture: Hsieh was known for his unique approach to management, and following the 2008 recession his ongoing investment and efforts to revitalize the downtown Las Vegas area.

Dan Primack, author of Pro Rata
15 hours ago - Economy & Business

The unicorn stampede is coming

Illustration: Annelise Capossela/Axios

Airbnb and DoorDash plan to go public in the next few weeks, capping off a very busy year for IPOs.

What's next: You ain't seen nothing yet.