News Release

Mutual Fund and ETF Fees Remained Near Historic Lows in 2025

|
| Print

Washington, DC; March 25, 2026— Average expense ratios for both actively managed and index mutual funds have decreased over the past 29 years, contributing to the overall decline in mutual fund expense ratios, a new report released today by the Investment Company Institute (ICI) shows. Similarly, average ETF expense ratios have seen a marked decline since 2017. The report, Trends in the Expenses and Fees of Funds, 2025, finds that from 1996 to 2025, average expense ratios fell 62% for equity mutual funds and 57% for bond mutual funds. Over the past nine years, expense ratios for index equity and bond ETFs have declined by 33% and 50%, respectively.

“The long-term decline in fund expense ratios reflects strong competition and economies of scale across the industry, as well as investors’ increasing preference for lower-cost funds,” said Shane Worner, ICI’s Senior Director of Industry and Financial Analysis. “As assets have grown and new entrants and products have expanded the marketplace, firms have reduced costs and delivered more cost-effective investment options to investors.” 

Average Expense Ratios for Both Actively Managed and Index Mutual Funds Have Fallen
Percent
Chart of equity v bond mutual funds

 

Note: Expense ratios are measured as asset-weighted averages.
Sources: Investment Company Institute, Lipper, and Morningstar

Similarly, Average Expense Ratios for Both Actively Managed and Index ETFs Have Fallen
Percent
 
Average Expense Ratios for Both Actively Managed and Index ETFs Have Fallen

 

Note: Expense ratios are measured as asset-weighted averages. Data exclude ETFs not registered under the Investment Company Act of 1940. For additional data on ETF expense ratios, see Figures S4, S5, and S6 in the statistical appendix.
Sources: Investment Company Institute and Morningstar

Key Findings in 2025

  • In 2025, the average expense ratio for equity mutual funds remained unchanged at 0.40%. 
  • The average expense ratio for bond mutual funds decreased 2 basis points to 0.36%.
  • In 2025, the average expense ratio for index equity ETFs remained unchanged at 0.14%. 
  • The average expense ratio for index bond ETFs fell 1 basis point to 0.09%.
  • As more money market funds continued to pare back expense waivers amid relatively high short-term interest rates, the average expense ratio for money market funds increased 1 basis point to 0.24% in 2025.

Read the full report.

    Tags
    Mutual Funds
    Fees and Expenses