A bit of good news for investors: average expense ratios for equity, bond and hybrid mutual funds declined in 2011, according to a report released today from the Investment Company Institute. Fund investors paid an average of 79 basis points for equity mutual funds and 62 basis points for bond funds, down 4 points and 2 points, respectively, from 2010.

ICI partly attributed the decrease in mutual fund expense ratios to industry competition and investors’ continuing shift into lower-cost funds. In particular, investors are gravitating toward index funds, whose expense ratios are generally lower than those of actively managed funds.

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