Final answer:
Laura should purchase index mutual funds and exchange-traded funds due to their lower fees compared to actively managed funds, offering her the cost-efficiency she desires.
Step-by-step explanation:
Laura, as a novice investor concerned with fees, should focus on purchasing index mutual funds and exchange-traded funds (ETFs). These investments tend to have the lowest fees compared to actively managed mutual funds. The management of index funds and ETFs is typically more passive, as they aim to mirror the performance of a specific index, which leads to lower operational costs and thus lower fees for investors. In comparison, actively managed funds have higher fees due to the active decision-making and constant trading by fund managers aiming to outperform the market.Explanation in more than 100 words: Investing in mutual funds can offer high returns over time, but they come with risks. This is true for both actively managed funds and index funds, though the latter typically provides a lower risk profile since they follow the broader market's average. High liquidity is a common feature for both types of funds if they're readily traded. When considering investment fees, index mutual funds and ETFs are more cost-efficient, making them an attractive choice for investors like Laura who prioritize low fees.In conclusion, for investors who prioritize low fees, investing in index mutual funds and exchange-traded funds is the most effective strategy because of their inherently lower expense ratios and cost-effective management styles.