Info · Reference
What funds actually cost
A fund's expense ratio is the slice of your money it takes every year, whether it beats the market or not. It's the rare cost you fully control — and over the last three decades it has collapsed, especially for index funds. These are the asset-weighted averages: what investors actually paid, not the sticker prices.
Data as of 2025 Investment Company Institute, “Trends in the Expenses and Fees of Funds, 2025” (Figure S3, asset-weighted averages). These are asset-weighted averages — what fund investors actually paid, weighting each fund by the money in it. 1996–2025. · source & method
- 0.05% average index stock fund today — about $5 a year per $10,000
- 0.64% average active stock fund — roughly 13× more than the index average
- 1.08% what the average active stock fund charged back in 1996
Expense ratios over time
Asset-weighted average expense ratio by fund type, at four points across the series. The bar shows today's level against the 1996 starting point.
| Fund type | 1996 | 2006 | 2016 | 2025 | Today, vs. 1996 |
|---|---|---|---|---|---|
| Actively managed equity | 1.08% | 0.98% | 0.82% | 0.64% | 0.64% now |
| Index equity Index | 0.27% | 0.19% | 0.09% | 0.05% | 0.05% now |
| Actively managed bond | 0.84% | 0.69% | 0.57% | 0.44% | 0.44% now |
| Index bond Index | 0.20% | 0.17% | 0.07% | 0.05% | 0.05% now |
Index funds now average around 0.05% — close to free. The gap between an active and an index fund is small as a percentage but, taken every year, it compounds.
Why a fraction of a percent matters
A fee isn't charged on your gains — it's charged on your whole balance, every year, so it compounds against you in lockstep with your returns. The gap between 0.64% and 0.05% looks trivial on a statement, but over an investing lifetime it can quietly consume a large share of the wealth you'd otherwise keep. The Fees & Inflation tool lets you watch that drag play out over decades.
Sources & method
Asset-weighted average expense ratios, transcribed from ICI's annual fee study. Refresh when a new edition is published (npm run data:fees).
Research
- Sharpe, W. F. (1991). “The Arithmetic of Active Management.” Financial Analysts Journal 47(1): 7–9.
- Malkiel, B. G. (1973). A Random Walk Down Wall Street. W. W. Norton & Company.
Data
- Trends in the Expenses and Fees of Funds, Investment Company Institute. Li, Lei (2026), 'Trends in the Expenses and Fees of Funds, 2025,' ICI Research Perspective 32(1), © Investment Company Institute. ICI permits brief, attributed excerpts; the asset-weighted average expense ratios quoted here are such excerpts, linked to the report, and no underlying data are republished.
Educational use only, not financial advice. Every figure traces back to the sources above or to the inputs you set — the full method and the source code are public.