Exchange-traded fund providers, including Vanguard, Charles Schwab and BlackRock's iShares, have been slashing the expense ratios on their index ETFs in the past two years, trying to one-up each other and win more of your investing money.
The stakes are high among the ETF industry giants, as investors embrace the passive style of fund management in greater numbers. The exchange-traded fund industry reached more than $1.9 trillion in assets at the end of August, according to ETF.com data, and 2013 saw a record level of flows into ETFs—$188 billion.
But the big question for the investor is not what the cost will be to the fund companies as they engage in a race to the bottom with fund fees, but instead: What benefit will it be to your financial future? Lower fund fees are great, but the fee war is not as simple an "investor win" as it appears.