The Investment Company Institute published "The Economics of Providing 401(k) Plans, Services, Fees and Expenses, 2009," an annual report that "examines the economics of providing 401(k) plans" Though money fund assets account for just $105 billion, or 7%, of the $1.5 trillion in 401(k) plan mutual fund assets, according to the study, the ICI report does have some interesting statistics on money fund expense ratios.
It says, "[E]xpense ratios of stock and bond funds averaged slightly higher in 2009, compared with 2008. The asset-weighted average expense ratios paid by 401(k) investors on their stock funds rose 3 basis points to 0.74 percent. The asset-weighted average expense ratio paid by 401(k) investors on their bond funds increased 2 basis points to 0.55 percent. Meanwhile, for money market funds, the asset-weighted average expense ratios paid by 401(k) investors fell 2 basis points to 0.36 percent."
ICI's 401(k) plan study comments on Money market funds," "Seven percent of 401(k) mutual fund assets were invested in money market funds at year-end 2009. For 401(k) participants holding money market funds, their total expense ratio was 0.36 percent of assets in 2009, compared with an industrywide simple average of 0.49 percent. In recent years, the 401(k) money market fund asset-weighted total expense ratio averages have been very close to the industrywide asset-weighted averages."
It adds, Furthermore, the asset weighted average expenses paid by 401(k) investors on their money market funds was 2 basis points lower in 2009 compared with 2008. The decline in money market fund fees in 2009 was due in part to individual funds reducing their fees in some cases as investment advisers waived advisory fees in the low interest rate environment."
In other news, ICI reported in its weekly "Money Market Mutual Fund Assets" that, "Total money market mutual fund assets decreased by $24.55 billion to $2.814 trillion for the week ended Wednesday, September 15, the Investment Company Institute reported today. Taxable government funds decreased by $1.11 billion, taxable non-government funds decreased by $20.17 billion, and tax-exempt funds decreased by $3.26 billion." (Funds normally see outflows on the 15th of each month due to tax payments.)
