The Average Mutual Fund Fees

A mutual fund is a pool of funds from multiple investors who purchase securities as a group. This provides access to profitable investments to smaller investors with limited assets. Mutual funds usually have a fund manager who oversees the investments, which results in fees to the investors.

Types

Mutual fund fees often fall into one of two groups: annual fees or transaction fees. Most mutual funds charge investors for both items, with the first representing an annual operating fee to keep investors in the fund and the second occurring when investors buy or sell investments.

Function

According to Investopedia, average mutual fund fees--commonly known as the expense ratio--are 1.3 to 1.5 percent of the total fund value. Brand name brokerage house, specialty or international funds may have higher expense ratios.

Considerations

High fees or top-name mutual funds do not guarantee success. Investors must pay close attention to the mutual fund's operations and previous performance, along with the fees charged. This provides some insight to the historical performance of the fund.

References

• Investopedia: Mutual Funds: The Costs