Mutual Fund Net Expense Ratio
Chart of the Week for August 21 - August 27, 2009
The chart above illustrates the average net expense for domestic equity, foreign equity and fixed income mutual funds over time. The mutual funds used to calculate the average are all registered in the United States. All share classes, as well as both actively and passively managed strategies, are equally weighted in the average net expense calculation.
According to the data depicted in the chart, mutual fund net expenses have generally decreased over the past decade. This decline benefits investors since it lessens the "hurdle rate" that an investment must clear before investors earn a profit. For each of the given categories of mutual funds, the average net expense in 2008 was less than that recorded in 1999.
Some observers, however, have predicted that mutual fund expenses could increase as a result of the stock market downturn that has occurred over the last 12-18 months. When mutual fund asset levels fall, fixed expenses increase as a percentage of assets, which in turn increases the net expense ratio that investors effectively pay. An indication of this may be evident as the average net expense for domestic equity funds increased from 1.31% to 1.32% between 2007 and 2008.
This illustration was compiled by information from outside sources. These companies are not affiliated with ICMA-RC. This information is being provided for educational purposes and is not intended to be construed as or relied upon as investment advice. ICMA-RC does not offer specific tax or legal advice. Individuals are advised to consider any new investment strategies carefully prior to implementing.
Please consult both the current applicable prospectus and MAKING SOUND INVESTMENT DECISIONS: A Retirement Investment Guide carefully for a complete summary of all fees, expenses, charges, financial highlights, investment objectives, risks and performance information. Investing in mutual funds and other investment vehicles involves risk, including possible loss of the amount invested. Investors should consider the Fund's investment objectives, risks, charges and expenses before investing or sending money. The prospectus contains this and other information about the investment company. Please read the prospectus carefully before investing. All Vantagepoint Funds invested through 401 or 457 plans are held through VantageTrust. Vantagepoint Funds are distributed by ICMA-RC Services LLC, a wholly owned broker-dealer subsidiary of ICMA-RC and member FINRA/SIPC. For a current prospectus, contact ICMA-RC Services, LLC.
The performance data quoted represents past performance. Past performance is no guarantee of future results. Investment returns and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data illustrated. For performance data current to the most recent month end, contact ICMA-RC Services, LLC by calling 800-669-7400 or by writing to 777 North Capitol Street, NE, Washington, DC 20002-4240. Para asistencia en Español llame al 800-669-8216. Performance data current to the most recent quarter end is available by visiting www.icmarc.org.