If you own a mutual fund, check your expense ratio and compare it to last year to see if your fund is costing you more. Even low-cost fund giant Vanguard has raised expense ratios on some funds. Don’t expect the fund to always inform you of the change. As a Vanguard investor, I did not know about the increase until Morningstar reported it, although Vanguard had issued an announcement that I later found.
You can avoid the fee creep from the funds by looking elsewhere at lower-cost index funds. Look even further by moving into exchange-traded funds, which are like mutual funds but trade on an exchange like individual company stocks. While an ETF can have an expense ratio of 0.1, it does charge a trading commission each time it is bought or sold. Therefore, ETFs can be costlier if you are making frequent investments or withdrawals. An ETF exists in almost every asset class, making it possible to have just as diversified a portfolio as using funds, or even more diversified by using specialty ETFs.
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