Figure 2.9. U.S. Mutual Fund Expense Ratios and Growth of
U.S. Index Funds
Fees charged by active funds are significantly higher than those
charged by index funds.
1. Expense Ratios of Actively Managed Funds and Index Funds
(Basis points)
Actively managed bond funds
150
Index bond funds
Actively managed equity funds
Index equity funds
100
50
0
2000 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
The share of index funds has increased dramatically over the past two
decades.
14
12
2. Growth in Total Net Assets of Index Mutual Funds
(Percent of total net assets of mutual funds)
Equity funds
Hybrid and bond funds
10
8
6
4
2
0
1995
2000
05
10
15
Sources: Investment Company Institute; and IMF staff calculations.
Note: The expense ratio is the annual fee charged by a mutual fund to its
shareholders, defined as the percentage of assets deducted for fees and
administrative expenses.