The hidden cost of high expense ratios

While a far cry from the old days of load fees and sales charges, mutual funds nevertheless still assess a small but significant fee as a percentage, or expense ratio, of the total worth of your investment.

• The expense ratio is clearly shown on any fund's listing on the Internet and in its prospectus

• Most expense ratios should be less than 1.7% for actively managed funds, and less than 0.7% for index funds, while Vanguard funds have ratios even less than that, around 0.3%

• Studies show funds with lower expense ratios outperform similar funds with higher expense ratios

• An exciting trend in the finance industry is that expense ratios continue to drop, rewarding the individual investor