When Vanguard founder Jack Bogle created the first index fund in 1974, the idea was to offer investors a cheap way to buy the performance of a broad market. That idea has caught on, especially recently: In 2013, everyone from 401(k) providers to mom and pop embraced index funds, sending almost $2 into them for every $1 they invested in actively managed funds, according to Morningstar.

But a handful of the firms riding that indexing wave actually turn Bogle's dream upside down: With fees that can run over $2.00 per $100 invested, they are more expensive even than most actively managed funds, and are among the worst deals widely available to fund investors, according to an analysis of data from Lipper. Yet, they continue to attract new investors even as they significantly underperform the booming stock market.

Guggenheim Partner's Rydex Funds, State Farm, and Federated Investors are among roughly a dozen issuers that charge annual fees that are higher than the average actively managed fund for funds that track the Standard & Poor's 500 index and other market benchmarks.

The worst offender - the $437 million Rydex S&P 500 fund, for example, levies an annual charge of $2.28 per $100 invested, a rate nearly four times the average cost among S&P 500 index funds of 60 cents per $100 invested and approximately double the cost of the average actively-managed large-cap fund. (Assets in this fund grew $134 million in 2013, with the most expensive share class increasing by nearly $10 million, according to Lipper data).

The fund's expense ratio is also more than 13 times the 17 cents per $100 invested fee levied by the $15.1 billion Vanguard S&P 500 index fund, one of the most widely-held funds in the country.

Those high fees have cut into investor profits. An investor who put $10,000 into the low-priced Vanguard S&P 500 fund on Jan 1, 2009 would have had $22,689 by Jan 1, 2014, according to Morningstar data. An investor who put the same $10,000 into the Rydex S&P 500 index fund, meanwhile, would have $20,307, or 10.5 percent less.

Rydex did not respond to several requests for comment. But other firms which sell high-priced index funds say that many of these outsized charges are caused by marketing fees that ultimately go to financial advisors and not the fund companies themselves. The funds are expensive because they are sold through advisers who take a cut, instead of being bought directly by investors, analysts say.

Wells Fargo, for example, says its charges for its S&P 500 index fund, which range as high as $1.31 per $100 invested, are priced near the average for broker-sold index funds.

"The financial advisors who are selling these funds are taking advantage of the ignorance of certain investors," said Samuel Lee, a fund strategist at Morningstar. "A lot of people don't have the knowledge to realize that these funds are available extremely cheaply. It's not a fully rational market."

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