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Pimco All Asset A (PASAX) has also been a hot seller. Like the Franklin fund, it's well-managed but pricey. Factoring in underlying fund expenses, the fund costs a steep 1.46% in the A shares.
In addition, some bond funds with relatively high costs lately have been big sellers. Thus, there is a real push and pull of different investors responding to costs.
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There may be more bad news on the horizon. The Spitzer-mandated fee cuts were spread out over a five-year period, and they'll expire over the coming two years. At that point, fund companies will be free to raise fees that had been forced down. Most were mum on the subject when I called them, but my guess is that we'll see a mixed response, with some boosting expenses and others holding the line.
Bargains abound
I'm disappointed to see the end of falling expense ratios, but there were plenty of good funds that lowered costs and even more that maintained already low costs. You've got to seek them out because there are thousands of high-cost funds, and there will always be some formerly good funds cranking up fees for one reason or another.Our Analyst Picks have a strict cost discipline, so you can use them to hunt for good low-cost funds.
This article was reported and written by Russel Kinnel for Morningstar.
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