Investors saved nearly $6 billion in 2019 due to declining fund fees, according to the Morningstar Fund Fee study.

Last year, investors paid half of what they paid in fees two decades ago, and the good news for investors is fees are continuing to decline, according to Morningstar, a research and analysis firm. Between 1999 and 2019, the asset-weighted average fee fell to 0.45% from 0.87%. Last year, the cheapest 20% of funds saw net inflows of $581 billion, with the remainder suffering outflows of $224 billion. The report includes U.S. open-end mutual funds and ETFs.

"Investors are increasingly aware of the importance of minimizing investment costs, which has led them towards lower-cost funds and share classes. There has also been intensifying competition among asset managers, who have cut fees to appeal to cost-conscious investors," said Ben Johnson, Morningstar's director of ETF and passive strategies research.

"Another factor has been changes in the way financial advice is delivered and paid for. As advisors move away from transaction-driven compensation models and toward fee-based ones, fund share classes that have fewer embedded advice or distribution costs are seeing more flows," Johnson added.

Between 2018 and 2019, average fees declined from 48 basis points to 45 basis points, saving investors $5.8 billion, the report said. The average expense ratio for active funds fell to 66 basis points last year from 68 basis points the year before and fees for passive funds fell from 14 basis points to 13 basis points.

“Strrategic-beta funds remain an attractive alternative to higher-cost actively managed funds,” Morningstar said. “In 2019, the asset-weighted average fee for strategic-beta funds was 0.20%, which was slightly higher than traditional index funds' 0.12%, but significantly lower than active funds' 0.66%.”

In recent years, providers of broadbased market-capitalization-weighted index funds have been engaged in what has been dubbed a ‘fee war’, Morningstar said.

“In September 2018, this fee fighting reached what seemed at the time to be its inevitable conclusion when Fidelity launched its lineup of zero-fee index mutual funds. More recently, ETF providers have followed suit,” the report said.