A survey from investment consultant Callan has found that expenses incurred from management fees decreased between 2015 and 2020, reports Pensions and Investments.

The Cost of Doing Business Survey queried pension funds, foundations, and endowments about how their expenses are allocated, and collectively, 87% of expenses were reported to go towards management fees in 2020, down from 93% in 2015.

For the first time in over two decades, the average expense that investors paid decreased, falling from 57.3 basis points in 2015 to 54.2 basis points in 2020.

“This is not surprising given the ongoing compression of active management fees, along with the increased usage of passive management,” said Ivan “Butch” Cliff, Callan executive vice president and director of research, in a news release announcing the survey results. “The aggregate results, though, mask the major differences in fee trends across asset owner type and size, which is outlined in the survey.”

The average expense for funds that were under $2 billion in AUM was 56.1 basis points, with funds above $10 billion coming in at an average of 53.6 basis points; funds in between $2 billion and $10 billion averaged 43.8 basis points in expenses.

Average fees for external management of funds were 43.2 basis points, a drop in two basis points from 2015, with the large funds incurring the highest fees at 51.5 basis points. Larger funds tended to use alternative asset classes more often, which typically incur higher fees.

The survey included 163 institutional investors that collectively had $975 billion in assets.

Active management firm T. Rowe Price believes in the difference and benefits to active investing and active management as it works to provide risk-adjusted returns for investors. The firm currently offers eight actively managed ETFs with a range in fees, from the T. Rowe Price QM U.S. Bond ETF (TAGG) with 0.08% in fees up to the T. Rowe Price Blue Chip Growth ETF (TCHP) with 0.57%.

The firm brings a bevy of experience and research to its products, with portfolio managers averaging over 20 years in investing each, as well as over 400 investment professionals dedicated to researching companies within ETFs.

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