Are Your Managers Overpaid?

Mutual fund expenses for operations and management fees are reported as an “expense ratio,” the percentage of fund assets taken annually by the fund company. Certain kinds of funds are more expensive to run than others, so investors should compare their funds’ expenses with the category averages, shown below.

Equity funds

Category: Avg. expense ratio

Div. Pacific/Asia: 2.8%

Latin America: 2.2

Div emerg mkts: 2.2

Pac/Asia ex Japan: 2.2

Japan: 1.9

Misc sectors: 1.9

World: 1.9

Intl hybrid: 1.9

Precious metals: 1.9

Technology: 1.8

Europe: 1.8

Natural resources: 1.7

Foreign: 1.7

Health: 1.7

Small growth: 1.7

Communications: 1.6

Mid-cap growth: 1.6

Financial: 1.6

Convertibles: 1.6

Large growth: 1.5

Mid-cap value: 1.5

Utilities: 1.5

Real estate: 1.5

Small blend: 1.5

Small value: 1.5

Mid-cap blend: 1.4

Large value: 1.3

Domestic hybrid: 1.3

Large blend: 1.2

Bond funds

Emerging markets: 1.8

Multi-sector: 1.4

International: 1.4

High yield: 1.3

Intermediate govt: 1.1

Muni national long: 1.1

Long-term invest: 1.0

Long government: 1.0

Short government: 1.0

Muni natl intermed: 1.0

Inter-term invest : 0.9

Short-term invest: 0.8

Ultrashort: 0.8

Source: Morningstar Inc.