Home     About Us    Contact Us     Contribute     Privacy
Mutual Funds
Related Articles
Related Definitions
Related Categories
Tip of the Day

Tip of the Day Pay Your Bills On Time

Pay Your Bills On Time - We all get behind on our bills every once in a while, but when it becomes a constant practice it starts to cost us...

read entire tip

Recently Added
Other Great Sites

Mutual Fund Expense Ratio

Before investing in any mutual fund, the investor needs to consider both the initial cost and the final return on his investment. Often overlooked, there is another expense which involves the cost of owning and maintaining the funds. This is known as the Management Expense Ratio (MER) or the mutual fund expense ratio. This expense is never charged directly to the investor, but to the fund itself. The expense ratio is a percentage of the fund's total assets which are applied towards paying fees instead of putting the money to "work."

In order to have a comparable return on an investment, the investor will need to consider these fees: the investment advisory fee, administrative costs, 12b-1 distribution fees and other operating expenses. The investment advisory fee (or management fee) is money allotted to pay the manager or managers of the mutual fund. Such a fee generally runs from approximately 0.50% to 1.0% yearly of the fund's assets. The administrative costs involve the necessary expenses of keeping records, mailings, maintaining a customer service line and so on. The fees for marketing, advertising, and distribution services are called the 12b-1 distribution fee. It ranges from .025% to 1.0% of a fund's assets. If possible, the mutual fund investor should try to avoid funds that charge this fee.

The expense ratio includes these expenses and factors them into one number (ratio) for simplification. For an actively managed mutual fund, the average expense ratio is approximately 1.50 %, a percentage which may possibly rise. What this basically means is that each year the mutual fund keeps for itself 1.50% of the total amount in the fund. This percentage will not alter even if the fund has a bad year. If the expense ratio rises, the fund will make sure it also adjusts accordingly and match the increase.

To be a wise investor, the person wanting to invest in mutual funds will consider all the costs of owning a fund and see if the investment return will be worth the MER. To make the right decision, he can read the fund's prospectus, go to the fund's website, or visit the site Morningstar.com, which has the ratio for all the mutual funds. Here, he will discover what percentage of the total assets of the fund will be spent on fees and the money that will not be accruing as a worthwhile return on his costly investment.

Discuss It!
1 2 >

discount codes said:

Itâs a tremendous post. I am truly grateful for this blog and I was in fact looking for something impressive like this should stay longer here, read all the post very nice posting you have

Coupon Codes said:

great post and I guess Iâm also a fan of blog commenting as it has numerous benefits

http://ucbrowserforpc.org/ said:

UC Browser for PC free download latest version 5.5 for windows XP/Vista/ 7/8/10. Get offline standalone direct high speed UC browser Download for PC & Laptop for window.

http://celebrity-birthdays.org/celebrity/royale-watkins said:

This is truly a remarkable perused for me. I have bookmarked it and I am reprisal taking a gander at new articles.

http://celebritynetworths.org/tag/gary-wit-da-tea/ said:

This is exactly what I was looking for. Thanks for sharing this great article! That is very interesting Smile I love reading and I am always searching for informative information like this!

navigate to this site said:

A very awesome blog post. We are really grateful for your blog post. You will find a lot of approaches after visiting your post. I was exactly searching for. Thanks for such post and please keep it up. Great work

bbw lingerie said:

In the wake of surveying your article I was smothered. I comprehend that you clear up it incredibly well.

itube apk said:


regrow hair protocol review watch said:

It's superior to anything standard to see that a couple people still see how to make a quality post !

Bijoux said:

I really had a monster measure of help from this and I may need to give back where its due and that is the reason

http://9appsapkapp.in/ said:

9apps is android app which let you download best android apps games wallpapers for free, download and install uc news now and enjoy

9apps apk said:

9apps is android app which let you download best android apps games wallpapers for free, download and install uc news now and enjoy

http://getapkapps.com/ said:

download best android apps and games for free!

basement finishing said:

This blog has overpoweringly satisfied its gathering of people.

9Appsapk said:


FIFA Coins said:

The compositions are so hypnotizing, you can't spend a moment without them.

123movies said:

After reading the blog writings, a spiritual relation is made between reader and writer.

roseclark said:

9apps provides you free access to Androids apps in different categories. Get more freedom and flexibility by choosing the best apps and their APK files from here.

Ritesh said:

Nice Info Sir

Vidmate said:

Thanks for information and please do visit our page for vidmate download http://vidmateinstalldownload.com/ http://vidmateinstall.org/ http://vidmateapk.info http://vidmateapk.net.in/ http://vidmateapk.org.in/ http://vidmateinstall.in http://vidmatedownloader.org http://vidmateinstall.org http://vidmateoldversion.co.in/ http://vidmateapp.net.in/

Most Popular Articles
Most Popular Definitions
Daily Definition

Definition of the Day Australian Securities Exchange

Australian Securities Exchange - The Australian Securities Exchange is the largest stock exchange in all of Australia, and is also known as the ASE, which opened for operation in 1987. Although its operations and functions have change with the times, it was transformed in 2006 after becoming the product in...

read entire definition




Home     About Us    Contact Us     Contribute     Sitemap


Copyright © 2009 TeenAnalyst.com