At the end of last year, mutual funds represented 63% of the $5.2 trillion in 401(k) plan assets. Plan participants incurred an average expense ratio of 0.41% for equity mutual funds in 2018, compared with 0.45% in 2017 and 0.77% in 2000 — a 47% decline.

The average expense ratio that 401(k) plan participants incurred for investing in hybrid mutual funds fell to 0.49% in 2018, down from 0.51% in 2017 and 0.72% in 2000. Bond mutual fund investors saw their average expense ratio hold steady at 0.34% between 2017 and 2018, down from 0.6% in 2000.

ICI noted in the statement that it uses asset-weighted averages to measure the expense ratios investors actually incur for investing in mutual funds.

The simple average expense ratio, which measures the average expense ratio of all funds offered for sale, can overstate what investors actually paid because it fails to reflect the fact that investors tend to concentrate their holdings in lower-cost funds.

According to the report, 401(k) plan participants' asset-weighted average expense ratio for equity mutual funds last year was less than the industrywide asset-weighted average expense ratio: 0.41% vs. 0.55%. Not only that, it was about one-third of the industrywide simple average of 1.26% for all equity mutual funds offered in the U.S. in 2018.