Since mutual funds require fees to pay for managers and the supporting analysts, a majority of funds may see their returns diminished by large expense ratios, even if the manager is a proficient stock picker. Actively managed funds may have expense ratios ranging from 0.5% to 2%. [How ETFs and Mutual Funds are Different]
In contrast, passively ETFs indexed to major U.S. stock benchmarks may come with expense ratios as low as 0.05%. [ETFs Taking Market Share from Index Funds]
For more information mutual funds, visit our mutual funds category.
Max Chen contributed to this article.
