Reducing Costs of 401(k) Plans with ETFs and Commingled Trusts
July 6, 2010
The brief’s key findings are:
- 401(k) plan expenses include both explicit fees and trading costs.
- Trading costs are a major expense for actively-managed funds.
- While such funds do not necessarily produce higher net returns, they do handle the bulk of 401(k) equities.
- Without giving up active management, shifting to exchange-traded funds and commingled trusts can cut total expenses by 0.7 percent of assets.
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Vitagliano, Francis M., Richard W. Kopcke, and Zhenya Karamcheva. 2010. "Reducing Costs of 401(k) Plans with ETFs and Commingled Trusts" Issue in Brief 10-11. Chestnut Hill, MA: Center for Retirement Research at Boston College.
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