For the year in June, only 19 percent of actively managed large-cap mutual funds outperformed the S&P 500 and only 8 percent outperformed over the last five years. No wonder index funds, with their low management fees, are more popular. Here’s more good news: Fees on index funds continue to fall.

In June Fidelity cut fees on 27 of its index exchange-traded funds (ETFs). A few weeks ago, BlackRock responded by cutting prices for 15 of its iShares broad market ETFs. Its iShares Core S&P 500 ETF (IVV) has a very low expense ratio of 0.04%. The Vanguard family is traditionally the low-cost leader, but this iShares fund is now slightly cheaper than Vanguard’s S&P 500 ETF (VOO).

The low-cost war didn’t end with Blackrock’s move. Schwab responded by cutting their ETF fees. Schwab doesn’t offer an S&P 500 ETF so a direct comparison to Vanguard and BlackRock is not possible, but they have carved a niche in low-cost market-cap funds. Their large-cap fund has a fee of 0.03 percent, their mid-cap fund has a 0.06 percent fee, and their small-cap fund has a fee of 0.06 percent. These are all lower than comparable ETFs from Vanguard and BlackRock.

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So who offers the lowest cost ETFs? Schwab is currently the low-cost champion, with its Multi-Cap Core ETF (SCHB) and Large-Cap Core ETF (SCHX) having a 0.03 percent expense. That means a $50,000 investment in one of these broad-market funds only costs $15 per year! Unbelievable.

Of course expense ratios aren’t the only cost associated with ETFs. Investors also pay the spread between the bid price and the ask price. If the ETF is heavily traded, it tends to have a narrow bid-to-ask spread. Investors also pay a trading commission, which should be less than $10 per trade.

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If you buy a Schwab ETF through Schwab or a Fidelity ETF through Fidelity, then the commission is waived. Either way, these fees are negligible for everyone except active traders.

The reduction in fees underscores the fierce price competition in the ETF market. When I began my career in the 1980s trading commissions were in the hundreds of dollars, mutual funds had outrageous load-fees of up to seven percent, and prices were calculated in eighths instead of pennies so bid-ask spreads were larger.

Investors are benefiting. Still, some say the game is rigged against investors. When it comes to fees just the opposite is true.

David Vomund is an Incline Village-based fee-only money manager. Information is found at http://www.VomundInvestments.com or by calling 775-832-8555. Clients hold the positions mentioned in this article. Past performance does not guarantee future results. Consult your financial adviser before purchasing any security.