Midnight trading. Hush-hush commissions. Corrupt executives. The recent torrent of headlines about mutual-fund scandals provides ample cause for outrage among investors. But if you're wondering how badly the industry's shenanigans have damaged your wallet, the answer is, probably not much. A Stanford University study found that overnight arbitraging in funds cost investors more than $4 billion a year. That's hardly a drop in the bucket, but it was widely diluted in a fund industry with $7 trillion in assets under management.
In fact, the far more consequential--but perfectly legal--rip-off is the bevy of bloated fees that fund firms charge to manage...
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