Vanguard's S&P 500 Index Fund Charges About $3 a Year on $10,000. The Average Stock Fund Charges About $40.
The fee gap starts at $37 a year. Where does it land after three decades?
Overview
The Vanguard S&P 500 ETF (NYSEMKT:VOO) charges an expense ratio of 0.03%, which is the share of assets the fund takes every year to pay its costs. For a $10,000 investment, that is about $3 annually.
The average stock mutual fund charges much more. The Investment Company Institute (ICI), the fund industry's trade group, put the average expense ratio of equity mutual funds at 0.40% in 2025, or about $40 a year for the same $10,000.
Details
A $37 difference won't change anyone's year. But a fee is charged every year, and the money it pulls out can't compound. In three decades, a gap so small can grow to nearly the size of the original investment.
Source
Originally published at www.fool.com.