The One Thing You Must Know About Fund Fees

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It’s a whopper many investors believe—you may even be one of them.

It’s simply this: all fees are evil.

After all, the more you shell out to line fund managers’ pockets, the worse your return will be, right?

It sounds right. It makes sense. But it’s totally wrong, particularly when it comes to the world of high-yield closed-end funds, which I’ll get to in a moment.

Truth is, you don’t have to go further than the darlings of “cheap” investing—exchange-traded funds—to see how bogus the so-called “wisdom” on fees is. Check out this chart showing the seven-year performance of two nearly identical ETFs—the Vanguard S&P 500 ETF (VOO) and the SPDR S&P 500 ETF (SPY), and keep in mind that VOO has always had lower fees than SPY:

The Cheap Fund Is … the Loser?
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About Author

Brett

Hi, I’m Brett Owens – and I’m a financial junkie. My “problem” started incollege, when I got a little dose of the stock market – man, was I hooked…in no time, I was reading the Wall Street Journal religously.

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