Although regulators have recovered more than $4 billion from mutual fund companies for late trading and market timing since 2003, investors have been overly charged an amount far in excess of that, Vanguard founder and longtime shareholder activist John Bogle says.
In fact, speaking to the International Herald Tribune, Bogle goes so far as to call excessive mutual fund fees a "subtle" scandal unto itself.
"Mutual fund investors have paid a far greater penalty for grossly excessive management fees and fund operating costs. The scandals are there--but they're very subtle ones," Bogle said.
To illustrate his point, Bogle noted that the stock market has returned an average of 13% a year over the past 20 years, while the average mutual fund has risen 10%--the balance being eaten up in management fees, sales charges and high portfolio turnover. "We've let the investor down in a great bull market. Think of what's going to happen in the market I foresee in the future, which is a much more subdued return," he warned.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.