I'll grant that the industry too has traditionally honored this principle. It is not that mutual funds conceal the direct costs of fund investing as such. For the investor who looks long and hard enough, the disclosure of fund management fees, expenses ratios, and sales charges can be found in each fund's prospectus. Earning less than half of the stock market's long-term return simply isn't good enough. With costs so high, it is in the industry's interest to ignore that self-evident fact, lest investor knowledge become investor power.
Price competition has thus yet to pervade the mutual fund industry.
But that invisible hand is, well, invisible in the mutual fund industry. It is clear that price competition has yet to be tried in the mutual fund industry. It has been the managers, not the fund investors, who have been the largest beneficiaries of the bull market, as is clearly illustrated by even a superficial comparison of the returns earned by the owners of mutual fund management companies and the returns earned by the owners of the very mutual funds they manage. Now, of course, we know the answer. It is with decidedly mixed emotions that I report to you that the Vanguard Experiment is over.