Let's get one thing out of the way at the outset. I've started mutual funds. I continue to run a family of mutual funds. The point isn't disclosure. The purpose of my mea culpa is to leave you with this thought: I know where the skeletons are buried.
When it comes to mutual fund expenses, believe it or not, there are good fees, bad fees and even a fee paradox. If you're a fiduciary or an investor trying to identify those mutual funds most suitable for your retirement plan, you better know the ins and outs of fees.
First, let's dispel a myth. Cheaper funds do not necessarily offer you the best investment. We all know that index funds have (or should have) the lowest expense ratio. We also know, despite the mantra often heard from index fund salesmen, academic studies have shown index funds do not consistently outperform active funds, sometimes for extended periods of time. As a fiduciary, you can't rely simply on the lowest price to protect you.
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