Model portfolios continue to hold a fee advantage against their mutual fund peers, according to the report. Even when compared against "unbundled" mutual fund shares that have the lowest built-in expenses, a model portfolio charges 11 basis points less on average across all five categories. Morningstar noted that its analysis includes only model portfolios with a reported portfolio as of December 2021 or newer. In addition, it does not account for the strategist fee, which some models may layer on as an additional cost. Allocation models aside, more specific offerings, such as model-delivered equity strategies, also hold a notable advantage when it comes to costs, the report said. Across Morningstar's three U.S. large-cap equity categories, the model-delivered offerings are 20 to 27 basis points cheaper. See the gallery for the top 10 model providers by assets as of March 31, with a comparison of assets as of June 30, 2021, unless otherwise indicated.
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