What Should You Pay for Financial Services? 9 Answers

One extra cost for all mutual funds, both active and index, is transaction costs. These costs are largely invisible to investors, but they can take a big bite out of returns depending on how often managers buy and sell holdings and which assets they’re buying. Large-cap value funds may lose less than 1% per year to trading costs, a 2013 study found, while small-cap growth funds can lose more than 3%. If you have an index fund, look at the returns of the fund and the benchmark. If you have an actively managed fund, look at the returns of similar funds in its category.