You might think that a plain-vanilla index mutual fund is synonymous with low fees. But some such funds are charging expenses that might make even a high-turnover momentum-fund manager blush.
The indexing revolution has been a boon for investors. Big fund companies have launched many nearly identical mutual funds and exchange-traded funds that track indexes such as the Standard & Poor’s 500. With nothing to compete on but price, that’s meant ever lower expenses for investors.
According to an April report from the Investment Company Institute, a trade group, stock-fund investors on average paid 0.77% in expenses in 2012, or $77 per $10,000 invested. That was down from 0.79% in 2011 and from 1% a decade ago.