With the rise of ETFs (Exchange Traded Funds) investors are now realizing the benefits of low cost index fund investments. For the majority of investors, mutual funds are very much a part of their investment mix. But until recently, the average investor was unaware of the total costs associated with owning mutual funds and the negative impact to achieving long term investment success.
John C. Bogle from Vanguard did a very telling study on “The Arithmetic of “All-In” Investment Expenses.” In his research report, John establishes the drag on mutual fund returns by estimating the investment expenses associated with them. Identified below are an illustration of the real costs of mutual funds including costs considered ‘hidden’.
Hi, my name is Jon and I run Compounding Pennies. I’ve been interested in personal finance since high school and love writing and talking about it. You can learn more about me in the Authors section of this site.