Morningstar recently screened for funds that tracked the S&P 500 Index in Morningstar’s database. In their research they found a disparity in fees among funds that track the S&P 500 Index. Morningstar found that of 85 funds their average net expense ratio with fee waivers was around 0.40% or 0.41%, depending on whether you use the fund’s most recent prospectus or its most recent annual report.

“The highest priced funds were those that tried to add something extra to traditional index-tracking, such as the  Invesco Equally-Weighted S&P 500 (VADAX), but at 1.50%, this seems like a steep fee to equally weight the stocks in the index. Other straight or passive index-trackers, however, charged north of 0.50%, such as BB&T Equity Index (BAEQX), which clocked in with a 1% net expense ratio. The class A shares of  BlackRock S&P 500 Index (MDSRX) came in at 0.61%, and  Dreyfus S&P 500 Index (PEOPX) charges 0.50%. Even  T. Rowe Price Equity Index 500 (PREIX), which comes from a shop with generally low fees on its actively managed funds, was only slightly below the average at 0.35%.” States John Coumarianos writing for Morningstar.

It should be noted that Vanguard has an S&P 500 ETF in the works the “Vanguard S&P 500 ETF” which is expected to have a total annual fund operating expense of .06%.

For the full Morningstar story click: HERE

Related story “Mutual Funds Are Costing Your Retirement In Excess Of One Million Dollars Over ETFs”

IVV, RSP, SPY