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In the U.S., the stock market keeps rising and fees keep falling — in part, because advisors have moved to fee-based.

U.S. investors paid less to own funds last year than ever before: about $48 in expenses for every $10,000 invested, according to a study by Morningstar. It found that the asset-weighted average expense ratio of U.S. open-end mutual funds and ETFs last year was 0.48%, down from 0.51% in 2017 — a 6% drop.

That drop represents the second-largest year-over-year percentage decline since Morningstar began tracking fees in 2000. That year, investors paid roughly double in fees compared to last year: $93 of every $10,000 invested.

In fact, the asset-weighted average expense ratio has fallen every year since then. Last year alone, Morningstar estimates that U.S. investors saved a cumulative US$5.5 billion thanks to the 6% drop in fees.

“Every $1 is worth fighting for,” said Ben Johnson, director of global ETF research at Morningstar. “And that’s $1 today that can be many dollars down the road,” thanks to compounding investing.

Index funds have played a big part in fee declines. Last year, U.S. passive funds kept $15 in fees on every $10,000 invested. Fierce competition has whittled down that number — it’s fallen from $25 a decade ago.

Investors also help drive the trend by voting with their dollars. In 2018 they moved a net $605 billion into funds that rank in the bottom 20% of their categories for fees. Among all the other funds, investors yanked out a total of $478 billion. Roughly three-quarters of the dollars that flowed to the lowest-cost funds went into passive funds, the report said.

Much of that movement has been at the direction of U.S. financial advisors, who increasingly charge fees for their services rather than receive commissions. The report said that the shift from management to planning has redefined advice, emphasizing asset allocation over security selection. The change in advice is helping “drive flows, and, by extension, fee trends,” it said.

In comparison to passive funds at 0.15%, active funds’ average expense ratio was 0.67%, an almost 5% year-over-year decline, and the largest annual percentage decrease measured since 2000. However, the drop was mainly driven by large net outflows from expensive funds and share classes, the report said. And investors in active funds still pay about 4.5 times more than those in passive funds on each dollar, “the widest disparity since 2000,” it said.

With so much pressure on fees, the industry has been introducing more funds that act almost as a hybrid of index and actively managed funds — smart-beta funds.

These funds track indexes, but they’re more fine-tuned and follow strategies similar to ones active managers use. For example, low-volatility funds track indexes that include only stocks with smaller swings in price than the broad market. Others follow indexes that hold only stocks with prices that have the highest momentum.

Last year U.S. smart-beta stock funds had an asset-weighted average fee of 0.17%, keeping $17 of every $10,000 invested.

Investors should be careful not to shop only by fees, said Morningstar’s Johnson. How the fund is constructed matters just as much — if not more. One low-volatility fund may have slightly lower expenses than another but track a much different index, which ends up leading to big differences in returns.

“Focusing too narrowly on fees can become a risk,” Johnson said.

Among U.S. asset managers, Vanguard continues to have the lowest asset-weighted average expense ratio, at 0.09% in 2018, the report said.