Expense Ratio Returns

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btenny
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Joined: Sun Oct 07, 2007 6:47 pm

Expense Ratio Returns

Post by btenny » Mon Jan 09, 2012 7:40 pm

I was studying some mutual funds from Prudential today (for a friend) and I found the returns very supect. I was using Yahoo chart data versus other funds like Wellington and the SP500 index. I was surprised how well the returns looked given they carry a 1.8% expense fees (class C) or a 5% front load plus a 1% expense fee ( class A). But then the returns posted there do not seem to include deductions of fees or expenses. Everything I see there is the total price of the fund. Where are the prices with fees deducted? Are the fund expenses effectively rolled into the fund price annually when they are paid?

How do you get good view of various funds with all the fund expenses and fees taken out for say 5 or 10 year periods? Or even better, where can I look for this data in chart form?

Bill

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mas
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Joined: Tue Feb 20, 2007 12:54 pm

Re: Expense Ratio Returns

Post by mas » Mon Jan 09, 2012 10:04 pm

Mutual fund prices are quoted with the expense ratio already factored in. Every day, a prorated amount is deducted from the fund's net assets.
Loads on the other hand are not. Every investor has different entry/exit points, so it would be difficult to include such data.

The best I know of is "Total Cost Projections" at morningstar, for example:
http://financials.morningstar.com/fund/ ... ture=en-us

Code: Select all

Total Cost Projections PSIAX, Per 10K
3 Years 	542
5 Years 	718
10 Years  1,228
By the way, yahoo's charts do not include the impact of reinvested dividends like Morningstar's do (at least for mutual funds).

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grabiner
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Re: Expense Ratio Returns

Post by grabiner » Mon Jan 09, 2012 10:12 pm

btenny wrote:I was studying some mutual funds from Prudential today (for a friend) and I found the returns very supect. I was using Yahoo chart data versus other funds like Wellington and the SP500 index. I was surprised how well the returns looked given they carry a 1.8% expense fees (class C) or a 5% front load plus a 1% expense fee ( class A). But then the returns posted there do not seem to include deductions of fees or expenses.
The expenses are included in returns charts, because they affect the money the fund has. Thus higher-cost share classes (such as Vanguard Investor Shares) have lower returns than lower-cost classes (such as Vanguard Admiral Shares).

The load is not usually included in the returns charts; thus, if you have to pay a load (or a purchase fee or redemption fee, such as Vanguard charges), you need to adjust the returns by prorating the load over the time you expect to hold the fund. A 5% load for 10 years is an extra 0.5% cost.
Wiki David Grabiner

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