Please stay tuned for important disclosure information at the conclusion of this episode.

Welcome to Investing Insights. I'm your host, Ivana Hampton. Many investors are ditching expensive

funds for cheaper ones to save on fees and is working.

The trend has pushed average expense ratios to a record low.

That's according to a Morning Star study.

Brian Armour is the director of Passive Strategy's Research for North America for Morning Star Research Services.

He's also the editor of the Morning Star ETF Investor newsletter.

Thanks, Brian, for joining me today. So your team looked at fund fees over a long period. Can you

tell us what you found? What are some of the highlights? Yeah. So in the last 20 years, we've seen

the average asset weighted expense ratio for open-end mutual funds

and ETFs drop from 91 basis points to 37. And so that's a big win for investors. It's a

trend that's been continuing as, you know, year over year. It's a lot smaller changes to get to that 20-year large number.

But in the equal-weighted average expense ratio, we see still at 91 basis point.

So that's the average fund what they're charging versus what's the average investor paying in asset weight of funds.

So there's still more room to cut based on that 91 basis point fee.

But yeah, it's been shrinking, which is great.

So what was your reaction when you saw the growing gap between money going into cheap funds

and leaving expensive ones?

It wasn't a surprise.

Perhaps the extent was.

We saw in similar fund flow trends going out of, you know, more expensive mutual funds into UTFs. And in the same way, here we saw the cheapest quintile funds actually pull in 400 billion dollars

worth of new investor money, whereas the other 80% saw outflows of 700 billion. So it's a 1.1 trillion

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