Tuesday, March 25, 2008

Largest mutual funds and their expenses

The table below lists the 25 largest mutual funds, their expense ratios and the total expense the shareholders in these mutual funds incur each year. The total expense the shareholders incur in a given year is dependant on the expense ratio of the fund and the total dollars invested in the fund by the shareholders. This number also reflects the amount of money the parent company earns in revenues for running that particular mutual fund.

As you can see from the table below, the largest mutual fund in United States is the American Funds Growth Fund of America with total net assets of about $85 billion dollars. This is just the A shares of this mutual fund. The table below does not account for the B, C or any other share classes this fund may have. The class ‘A’ shares alone has about $85 billion in assets. The expense ratio of this fund is 0.62%. Multiply the total assets $85 billion with 0.62% and you get about $530 million dollars. This is how much the shareholders of the Growth Fund of America pay the American Funds to run the fund operations. This also means that the American Funds also gets $530 million dollars a year to manager other people’s money.

The Vanguard group normally has the lowest expense ratios for their funds because of the Vanguard’s unique ownership structure. You could say that the shareholders of the Vanguard funds collectively own the Vanguard group. The largest mutual fund from the Vanguard group that made the list is the 500 index fund, which has a paltry 0.18% expense ratio. The shareholders pay only about $102 million in expenses for their collective $57 billion invested in the 500 index fund. I have recently noticed that the Vanguard mutual fund expense ratios have gone down even some more.

Symbol Fund Name Total Net Assets Expense
Total Expenses
Paid By
AGTHX American Funds Growth
Fund of America A
$85,618,712,576 0.62 $530,836,018
CAIBX American Funds Capital
Income Builder A
$78,065,221,632 0.55 $429,358,719
CWGIX American Funds
Capital World G/I A
$77,768,237,056 0.69 $536,600,836
Return Instl
$75,467,661,312 0.43 $324,510,944
FCNTX Fidelity Contrafund $72,805,416,960 0.89 $647,968,211
AIVSX American Funds
Investment Co of Amer A
$69,176,573,952 0.54 $373,553,499
AMECX American Funds Income
Fund of Amer A
$63,430,389,760 0.54 $342,524,105
AWSHX American Funds
Washington Mutual A
$61,855,260,672 0.57 $352,574,986
AEPGX American Funds
EuroPacific Growth A
$58,035,060,736 0.75 $435,262,956
VFINX Vanguard 500 Index $57,096,368,128 0.18 $102,773,463
DODGX Dodge & Cox Stock $56,480,501,760 0.52 $293,698,609
FDIVX Fidelity Diversified
$50,760,208,384 0.91 $461,917,896
DODFX Dodge & Cox
International Stock
$49,587,798,016 0.66 $327,279,467
VTSMX Vanguard Total
Stock Mkt Idx
$48,000,520,192 0.19 $91,200,988
ANWPX American Funds
New Perspective A
$45,675,159,552 0.70 $319,726,117
VINIX Vanguard
Institutional Index
$42,257,670,144 0.05 $21,128,835
FMAGX Fidelity Magellan $39,363,391,488 0.53 $208,625,975
ABALX American Funds
American Balanced A
$36,892,069,888 0.58 $213,974,005
ANCFX American Funds
Fundamental Invs A
$36,704,739,328 0.58 $212,887,488
VFIAX Vanguard 500
Index Adm
$33,773,611,008 0.09 $30,396,250
FDGRX Fidelity Growth Company $33,291,870,208 0.96 $319,601,954
FKINX Franklin Income A $33,200,670,720 0.63 $209,164,226
FLPSX Fidelity
Low-Priced Stock
$31,330,760,704 0.96 $300,775,303
VBMFX Vanguard Total
Bond Market Index
$30,592,569,344 0.20 $61,185,139
VWELX Vanguard Wellington $29,890,820,096 0.27 $80,705,214
-Totals $1,297,121,263,616 -$7,228,231,201

The 25 largest mutual funds hold about $1.3 trillion in total assets and mutual fund shareholders pay a total of $7.2 billion dollars in expenses. One thing to notice from the table below is that every one of the 25 largest mutual funds has expense ration below 1%. That is the good news. The bad news is that many funds from the table are class ‘A’ funds. That means that shareholders paid hefty front loads to be able to invest in them. All of the American funds are class A funds.

Datasource: MSN Moneycentral mutual fund screener as of March 25, 2008


Chase Saunders said...

I noticed that you haven't blogged in a while and wanted to encourage you to do so... great blog!

Anonymous said...

More bad news.... The "published" expense ratios are only part of the story. If you study their Statement of Additional Information (SAI) you will find all kinds of other expenese that are not included in the published expense ratios. Just one example - the cost of buying and selling stocks. If your fund has high turnover percent, you are paying tons in extra expenses you don't even know about.

Anonymous said...

nice table. one good addition would be a column showing the real shareholder returns (after load+expenses) for a representative amount (say $10000) for 1yr,5yr, and fund lifetime periods with respect to, say, the Wilshire 5000.

I suspect that looking at this figure along side what the PM is making will emphasize the scandal that is non-index funds viz. that of PMs getting fat by perpetuating the myth of being able to beat the market persistently.