The Impact of Mutual Fund Fees

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Fees really are important. Fees are guaranteed. Returns are not.

Tiny Tuna of IL 4:22PM February 27, 2010

Ben, we at kaChing did a study in conjunction with respected mutual fund research firm, Lipper Inc. on actively managed mutual fund fees. The study revealed actively managed mutual fund investors pay an average of 3.37% in annual fees. You can see details of our analysis here:
https://www.kaching.com/site/mutual-fund-fees
At kaChing, our customers pay on average of 1.47% per annum to invest in our investment managers. In addition to our lower fees compared to actively managed mutual funds, kaChing also offers full transparency and screens the talent so customers don't simply choose investment managers based on past returns. All in all, we think we offer a damn compelling alternative to actively managed mutual funds.
Dan
Founder of kaChing

Dan of CA 1:59PM February 25, 2010

I agree with Keith - you have to evaluate a fund based a large part on past performance and the fee is already calculated in. However, I consider the fee (as well as other things) to some extent because past performance doesn't always predict future performance.
I also question the philosephy that investing in low cost index funds is superior to managed funds. There are many managed funds available that have a long running history of beating their comperable index.
I suspect in both cases, it requires the investor to be reasonably educated and "sober" in their investment decisions.

BillInStl of MO 1:59PM January 12, 2010

Say two people invest $10,000 in two different stock funds, which both gain an average of 8 percent per year over 10 years. - They would have the same amount of money!
Why?
How would one know that the average return was 8% per year over 10 years? Oh, they would look at Morningstar or the fund company's reports. Guess what? The return is NET of the fee. Consequently, the case could be made that the fund charging more is better at what they do because the fund netted the same return despite slightly higher fees....
Quit scaring people.

Keith Rogers of VA 1:15PM January 08, 2010