Mutual funds that buy and sell stock incur costs on these transactions. These transaction costs are not included in a fund’s expense ratio. Transaction costs include brokerage commission expense, buy and sell spread costs, and market impact costs, Among these costs, only brokerage commission costs are reported. These costs are recorded in the N-CEN report. We can take this expense and divide it into a fund’s average net assets to produce a commission expense ratio, analogous to a fund’s reported expense ratio. This blog entry will examine the brokerage commission expense of Vanguard active and passive funds from 1994 to 2019.
This post contains spreadsheets that detail various aspects of the Vanguard Mid Cap Index Fund. Accounting data The accounting figures and associated ratios can help one visualize some of the major determinants of a fund’s tendency to distribute taxable gains. These determining features include: Turnover: The rate at which a fund manager sells securities within … Read more