Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:Don Phillips, Mutual Fund Myth Buster! Not Rated 0.0 Email Routing List Email & Route  Print Print
Monday, June 24, 2013

Don Phillips, Mutual Fund Myth Buster!

News summary by MFWire's editors

The president of Morningstar's Equity and Mutual Fund Research, Don Phillips, set out to destroy an urban myth about mutual funds' hidden fees. Though investors may have heard that mutual funds have hidden fees of 140 to 200 bps, large cap funds' fees of that type are less than 7 bps on average with small cap funds having higher brokerage costs.

The cost of trading friction is important to note, but is nowhere near 140 to 200 basis points. If a mutual fund des a terrible job at trading, Phillips said it is possible to to come near costs of 140 bps. Phillips dispels the notion of high fees by pointing out that the average index fund would trail its index by its expense ratio plus 140 bps. Over the trailing past five year years the average large-cap equity fund trails the market index by only 25 bps. Putting it in more colorful terms:

"Put another way, the thing lurking in the shadows of your mutual fund is a squirrel, not a werewolf."

To check out the full story, click here

Edited by: Casey Quinlan


Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE

0.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2020: Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Raw XML
Add to My Yahoo!
follow us in feedly




©All rights reserved to InvestmentWires, Inc. 1997-2020
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use