There is a great article in the Wall Street Journal about the price wars between different ETF issuers and what it means for investors. ETFs have been cheaper than mutual funds for a long time. Now the cost differentials are widening and there is speculation that some ETFs will ultimately have expense ratios of zero. The article notes that the average expense ratio of an actively managed US domestic equity mutual fund is 1.38%. That is an AVERAGE. Currently an investor can get broad exposure to the total US stock market via an ETF at a cost of 0.06% (and it may soon be 0.00%!).
