Mutual fund investors are unwittingly paying more than $17.3 billion of undisclosed mutual fund costs per year, according to a new study released this week by Zero Alpha Group, a national investment advisory group. Trading costs proved to be a major factor in inflating hidden fund expenses that are undetectable to many investors.

"Only a part of that extra cost is detectable through publicly available documents, and that is only if you dig into obscure mutual fund documents that very few investors know anything about," said Scott Sarber, vice president at Petersen Hastings Investment Management . "When you add on top of that the completely unreported implicit costs of trading, you are left with a big credibility gap in mutual fund reporting to investors."

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