he Investment Company Institute
has crunched the numbers and found that mutual fund costs declined by about five percent to 128 basis points to 135 bps from 1998 to 2001. A fall in distribution costs -- which dropped by 23 percent -- was the biggest factor in the decrease, according to the ICI (see the full report here
Distribution costs are down because of an increased proportion of no-load funds in the sales mix. Also lowering those costs are increased sales through institutional channels such as 401(k) plans. Those channels often feature load-waived shares.
The industry trade group adds that costs have declined by 43 percent since 1980 and that distribution costs are down 73 percent over that period. The costs of money market funds and bond funds fell by even more (17 percent and 14 percent respectively) since 1998.
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