The average annual expense ratio of U.S. mutual funds last year rose to 1.266%, up from 1.249% in 2001, according to a report Lipper released yesterday.

"Expense ratios have increased, and that’s because the average net assets have fallen," Jeff Tjornehoj, an analyst with Lipper, told Reuters, which reported the fact in Lipper’s 240-page report, "Global Themes in the Mutual Fund Industry." Equity funds lost nearly 21% in value, their worst performance since a 25% decrease in 1974, according to the report.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.