Are Your Managers Overpaid?
Mutual fund expenses for operations and management fees are reported as an “expense ratio,” the percentage of fund assets taken annually by the fund company. Certain kinds of funds are more expensive to run than others, so investors should compare their funds’ expenses with the category averages, shown below.
Equity funds
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Category Avg. expense ratio Div Pacific/Asia 2.8 Latin America 2.2 Pac/Asia ex Japan 2.2 Div emerg mkts 2.1 Precious metals 1.9 Japan 1.9 World 1.9 Europe 1.8 Intl hybrid 1.8 Natural resources 1.8 Technology 1.7 Foreign 1.7 Health 1.7 Small growth 1.7 Communications 1.6 Convertibles 1.6 Financial 1.6 Mid-cap growth 1.6 Real estate 1.6 Large growth 1.5 Mid-cap value 1.5 Small blend 1.5 Small value 1.5 Utilities 1.5 Mid-cap blend 1.4 Domestic hybrid 1.3 Large blend 1.3 Large value 1.3
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Bond funds
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Category Avg. expense ratio Emerging markets 1.8 Multi-sector 1.4 International 1.4 High yield 1.3 Intermediate govt 1.1 Muni national long 1.1 Short government 1.0 Long-term invest 1.0 Interm-term invest 1.0 Muni natl Intermed 1.0 Long government 0.9 Short-term invest 0.8 Ultrashort 0.8
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Source: Morningstar Inc.
