A report released June 29 by the Investment Company Institutefound that 401(k) participants paid lower expense ratios on stockmutual funds in 2010 than in 2009.
The report, The Economics of Providing 401(k) Plans:Services, Fees and Expenses, 2010, found theasset-weighted average expense ratio for stock funds dropped 3basis points to 0.71% in 2010, following a drop in three of theprevious five years. Of the $3.1 trillion in 401(k) assets as ofyear-end 2010, more than half was invested in mutual funds,especially stock funds.
While expense ratios for bond funds were unchanged between 2009and 2010, the asset-weighted average expense ratio on money marketfunds fell 9 basis points to 0.28%. This decline, according to ICI,is largely due to the low interest rate environment and fee waiversfrom many money market fund providers.
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