What is your fee for buying a mutual fund?

The asset-weighted OER ratio, a crucial indicator in evaluating the cost-efficiency of mutual funds, stands at 0.05% for passively managed funds. This figure highlights the relatively low expense associated with such funds, which typically track a specific index or benchmark.

It is important to note that OERs, or operating expense ratios, can vary significantly among different mutual funds. For passively managed funds, the OER range is quite narrow, spanning from 0.02% to 0.39%. This indicates that while there is some variation, the overall cost structure tends to be consistent.

In contrast, actively managed mutual funds exhibit a higher asset-weighted OER ratio of 0.76%. This elevated figure reflects the additional costs associated with active management, which includes research, trading, and other expenses aimed at outperforming a benchmark or index.

The OER range for actively managed funds is wider, spanning from 0.38% to 1.09%. This wider range underscores the varying strategies and costs employed by different fund managers in pursuit of alpha, or excess returns.

The comparison between the OER ratios of passively and actively managed funds highlights the fundamental trade-off between cost and potential performance. Passively managed funds offer lower costs but may not outperform the market, while actively managed funds aim for higher returns but at a higher cost.