The average expense ratios for equity, hybrid, and bond mutual funds fell to 20-year lows during 2015, and money market expense ratios stayed at their 2014 lows.
According to data from the Investment Company Institute, the rise of index funds has contributed to the decrease in equity fund expense ratios, which on average fell 2 basis points to 68 basis points (0.68 percent of assets) in 2015. This follows a 4-basis-point decline in 2014, and makes it six years straight during which equity fund expense ratios have fallen.
An increase in the share of equity fund assets held in index funds contributed to the decline in equity fund expense ratios: Actively managed equity fund assets fell by $275 billion in 2015, while index equity fund assets rose by $109 billion.
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