From "John Bogle on Investing..."
Average mutual fund expenses 1984-1999
Sales commission: 0.5% (annualized)
Cash drag: 0.6% - money not invested in the market
Transaction costs: 0.7%
Expense ratio: 1.2%
Tax: 2.7% !!!!
Total reduction in return: 5.7%
Reduction in return of the Wilshire 5000 Index fund same period: 1.1%
Yes, costs matter (alot). No, an active manager cannot consistently
make that up despite what the financial
press may claim otherwise.