Low Cost, More Demand

CA - 2016-5-4 - Low cost fund flowsThe average investor isn’t stupid.  The latest evidence comes from a look at where investors are putting their money, taken by the Morningstar mutual fund data organization.

Morningstar found that when they ranked funds by how much they cost their investors, from the top 20% to the bottom 20%, they found that the lowest fee equity and fixed income funds were receiving new money from investors, while money was draining out of all of the other funds.  In other words, all the growth was in the lowest-fee mutual funds.  (see chart for more details)

Morningstar has repeatedly found that the mutual funds with lower fees have tended to outperform higher-cost funds—and its rankings now include measures that look at how well different companies align their policies with their investors’ best interests.  Companies that are maximizing their profits at the expense of their investors are discovering that investors have caught on to the game.

Source:

http://news.morningstar.com/Cover/videoCenter.aspx?id=751493

About Objectively Speaking

Tom Batterman, founder of Vigil Trust & Financial Advocacy and Financial Fiduciaries, LLC is in the business of representing the best financial interests of his clients. Having provided objective, fee-only financial management services for over two decades, he specializes in managing the investment and related financial affairs of individuals and mutual insurance companies who do not have the time, interest or expertise to manage such matters on their own. As an objective, unbiased professional who takes on a fiduciary responsibility to his clients, he guides clients to the financial decisions they would make themselves if they had years of training and experience and the time and expertise to fully research and understand all of their options. Founded in 2010 as an outgrowth of Vigil Trust & Financial Advocacy, Financial Fiduciaries, LLC is a financial management solution for individuals and mutual insurance companies who recognize they do not have the time, interest or expertise to properly attend to their financial matters on their own. While there are many financial “advisors”, most of them have investment products to sell and the “advice” they provide is geared toward getting their clients to engage in a purchase. As one of the rare subset of advisors known as “fiduciary advisors”, Financial Fiduciaries does not sell any investment product so its guidance is not compromised by conflicts of interest which plague ordinary advisors. Prior to his employment in the financial industry in financial advocacy and trust positions, he worked at a private law practice in the Wausau area in the areas of estate planning, tax, retirement planning, corporate organizations and real estate. He is a graduate of the University of Wisconsin-Madison and the UW-Madison Law School and has during his career held Series 7, 24 and 65 securities licenses. A longtime resident of the Wausau, Wisconsin Area, Tom is active in the community. He enjoys golf, curling, skiing, fishing, traveling and spending time with his family.
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