Delivering value with a low-cost approach to 401(k) plan investments.

Potential benefits of low-cost investment choices:

For sponsors

  • Lower fund operating expenses.
  • Can expand choices and lower fees for participants with index mutual funds and exchange-traded funds.
  • Help lower or eliminate investment minimums.
  • May free up resources and allow plan to offer personalized advice and managed account services.

For participants

  • Putting fewer dollars toward fees may mean having more available to invest.
  • May make higher returns possible, as index funds often outperform actively managed funds.1
  • Thanks to compounding, the more participants invest early and over time, the more potential for their 401(k) to grow.

Expense and low cost

  • Expense ratios have steadily fallen for mutual funds and ETFs over the past few decades.

    The asset-weighted average expense ratio across all funds was 0.57% in 2016, down from 0.61% in 2015 and 0.65% in 2014.2

  • Low-cost index funds can outperform actively managed funds.

    84.23% of large-cap fund managers underperformed the S&P 500® Index over the past five years, and 80.56% have underperformed the benchmark since 2014.1

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