Mutual fund investors appear to favor lower fee funds more than the industry itself.

According to the latest ICI Annual Mutual Fund Shareholder Tracking Survey, the asset-weighted expense ratio of mutual funds held by investors declined by 40% between 2000 and 2017, from 0.99% to 0.59%, while the average expense ratio charged by mutual funds (with each fund or fund class weighted equally) fell by only 21%, from 1.6% to 1.25%.

Shareholders are clearly favoring lower-cost fund assets more than the fund industry does,  an investor preference also reflected in fund flows.

One-year net flows into lower cost passive U.S. mutual funds and ETFs through the end of June totaled $526.43 billion compared to $27.9 billion into higher cost active U.S. mutual funds and ETFs, according to the latest Morningstar fund flows report. Passive U.S. equity funds experienced net inflows of $165.09 billion through the end of June, while their active counterparts saw net outflows of $199.1 billion.

The ICI survey, based on a telephone sample of several thousand households, found that eight in 10 fund-owning households consider fees and expenses when selecting funds, with 40% noting that fees and expenses are “very important” considerations.

Historical performance was an even more important factor for fund investors, according to the ICI survey. Almost 90% of fund-owning households cited historical performance as a consideration when choosing funds, including 50% they rate historical performance as very important.

Fund performance compared to an index – the benchmark by which fund managers are judged and often compensated – was slightly less important. Seventy-eight percent of fund-owning households cited that metric, with slightly less than half of them (35%) viewing it as very important.

A fund’s investment objective and risk profile were important considerations for 81% and 84%, respectively, of respondents. Thirty-six percent said it was very important.

“Mutual fund–owning households review many factors when choosing mutual funds to help them achieve their investment objectives, such as the fund’s fees and expenses, the historical performance of the fund, and the risk level of the fund’s investments,” said ICI Senior Director of Retirement and Investor Research Sarah Holden. “By carefully considering these aspects of a fund, they are able to make informed choices and save and invest to meet their future financial goals.”

Equity funds are the most popular, owned by 87% of households that invest in mutual funds and they account for 59% of their fund assets.