American retailers have long wooed shoppers with discounts or special sales. Now, a handful of fund companies are beginning to catch onto the trend, The Wall Street Journal reports.
Pioneer Investments added an addendum to its new principal-protection funds in June telling investors that if it couldnt attain certain results, it would lower its 2.05% annual fees to 12 basis points. Likewise, ING Group also lowered the fees on its principal-protection funds from 1.75% to 95 basis points.
With bond funds currently yielding an average 4% and equity funds expected to yield single-digit returns for the next decade, it only stands to reason that investors complacent about fees during the bull run will now turn their keen attention to fees. Although the average fund fee is typically 1% to 3%, no load funds can carry annual fees of as much as 4% and upfront loads can top 5.75%. Thats enough to stop an investor in their tracks, and, The Journal surmises, smart fund companies are likely to follow in Pioneers and INGs steps.