Subscribe to our newsletter. Join the discussion. The GAO questioned whether mutual fund shareholders are receiving enough information about operating fees being charged to enable them to evaluate the value of these fees to their individual investments. The GAO also questioned whether mutual fund directors are aggressively managing fees toward reducing investor costs or just maintaining a fee status quo.
Fees can be the largest drag on mutual fund returns for investors.
Over 80 million individuals own mutual funds representing 48.4 million or half of all US households. The GAO certainly doesn't think so. It is believed this would encourage increased competition and ultimately result in lower investment costs for mutual fund shareholders. Fees are presented clearly in the prospectus before a fund investment, but it is not required to do so once an investor purchases the fund. Fund performance is stated after all fees have been deducted, which is what is required by law, but this does tend to hide the actual costs investors incur for the investment advice.