The following table provides the “Net Expense Ratio” and the “Turnover Ratio” for all the broad Morningstar Mutual Fund Categories. As you can see, both these ratios are considerably higher than the comparable numbers for Exchange Traded Funds. For example, the weighted average Expense Ratio for our Global Equity ETF Model is 0.31% vs. 1.46% average for World Stock Mutual Funds. This saving goes directly to augment the investor’s bottom line. You can use this table to compare the costs of your current portfolio to an average Mutual Fund and get an idea of where you stand on the cost curve.

MUTUAL FUND AVERAGE EXPENSE & TURNOVER RATIOS SOURCE: MORNINGTAR (May 2013)

 

Name

Morningstar Category

Prospectus Net
Expense Ratio

Turnover Ratio %

DOMESTIC EQUITY
US OE Large Blend Large Blend 1.18 70.60
US OE Mid-Cap Blend Mid-Cap Blend 1.30 69.11
INTERNATIONAL DEVELOPED EQUITY
US OE Foreign Large Blend Foreign Large Blend 1.41 69.77
US OE Foreign Small/Mid Blend Foreign Small/Mid Blend 1.43 43.69
US OE Europe Stock Europe Stock 1.69 134.00
US OE Pacific/Asia ex-Japan Stk Pacific/Asia ex-Japan Stk 1.80 82.16
EMERGING MARKES EQUITY
US OE Diversified Emerging Mkts Diversified Emerging Mkts 1.64 77.13
WORLD EQUIDITY
US OE World Stock World Stock 1.46 62.26
DOMESTIC FIXED INCOME
US OE Short-Term Bond Short-Term Bond 0.84 133.64
US OE Intermediate-Term Bond Intermediate-Term Bond 0.92 229.34
US OE Long-Term Bond Long-Term Bond 1.00 105.54
US OE High Yield Bond [/glossary]High Yield Bond[/glossary] 1.16 78.09
US OE Inflation-Protected Bond Inflation-Protected Bond 0.82 95.31
US OE Muni National Interm Muni National Interm 0.84 36.67
US OE High yield Muni High yield Muni 1.02 26.75
US OE Multisector Bond Multisector Bond 1.21 99.26
WORLD FIXED INCOME
US OE World Bond World Bond 1.12 137.95
EMERGING MARKETS FIXED INCOME
US OE Emerging Markets Bond Emerging Markets Bond 1.27 84.04
GLOBAL BALANCED
US OE World Allocation World Allocation 1.45 118.09
TRADITIONAL ALTERNATIVES
US OE Commodities Broad Basket Commodities Broad Basket 1.35 190.12
US OE Natural Res Natural Res 1.54 73.72
US OE Convertibles Convertibles 1.25 72.28
US OS Real Estate Real Estate 1.37 73.09
US OE Global Real Estate Global Real Estate 1.50 78.96
ALTERNATIVE INVESTMENTS
US OE Long/Short Equity Long/Short Equity 1.94 479.43
US OE Managed Futures Managed Futures 2.31 311.57
US OE Market Neutral Market Neutral 1.79 442.87
US OE Multialternative Multialternative 2.07 221.74
US OE Multicurrency Multicurrency 1.37 123.56
Volatility
US OE Single Currency Single Currency
ASSET-ALLOCATED FUNDS
US OE Retirement Income Retirement Income 0.98 38.44
US OE Conservative Allocation Conservative Allocation 1.34 77.76
US OE Moderate Allocation Moderate Allocation 1.34 74.42
US OE Aggressive Allocation Aggressive Allocation 1.51 56.23
TARGET DATE FUNDS
US OE Target Date 2000-2010 Target Date 2000-2010 0.96 42.68
US OE Target Date 2011-2015 Target Date 2011-2015 1.01 49.79
US OE Target Date 2016-2020 Target Date 2016-2020 1.06 35.59
US OE Target Date 2021-2025 Target Date 2021-2025 1.02 34.45
US OE Target Date 2026-2030 Target Date 2026-2030 1.10 34.30
US OE Target Date 2031-2035 Target Date 2031-2035 1.06 33.13
US OE Target Date 2036-2040 Target Date 2036-2040 1.12 32.06
US OE Target Date 2041-2045 Target Date 2041-2045 1.07 32.68
US OE Target Date 2046-2050 Target Date 2046-2050 1.13 38.67
US OE Target Date 2051+ Target Date 2051+ 1.05 34.54

 

Mutual Funds are inefficient, lack transparency, have high costs and high turnover!