Further Fund Fee Drops Are Likely.

Bank Investment Consultant, August, 2006 by Hintze, John

Mutual fund fees and expenses fell last year to the lowest levels in 25 years, according to the Investment Company Institute (ICI), a trend, which is likely to continue in the years ahead. The lower fees and expenses reflect the investment market's changing priorities and dynamics, offering reps a more attractive product to sell to cost-conscious investors. But according to some, fees haven't fallen far enough.

The ICI, based in Washington, D.C., reported in June that stock investors on average paid 113 basis points in fees and expenses during 2005, a drop of four basis points from the year before. Fees and expenses on bond funds fell two basis points, to 90 basis points. Money market funds saw a smaller decrease, to 41 basis points last year from 55...

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