Morningstar Fund Comparison

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chuck_lumley
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Morningstar Fund Comparison

Post by chuck_lumley »

Have been looking at Morningstar comparing fund returns and just wondering if the results include the expense ratio or if it is just a gross return number. If there is a more accurate fund comparison page please for finding ER adjusted returns it would be appreciated.
aristotelian
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Re: Morningstar Fund Comparison

Post by aristotelian »

Return numbers should be net of fees.
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nisiprius
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Re: Morningstar Fund Comparison

Post by nisiprius »

1) You can verify for yourself that returns are net of fees by comparing different share classes of the same fund. For example, VWELX and VWENX. Check the expense ratios and, say, the year-2019 returns. Try it yourself.

2) As far as I know, published "return" numbers for mutual funds are always net of fees. I assume this is regulation and not just honesty.

3) People trying to sell high-cost funds sometimes use this as a reason to ignore expenses: "If a fund can make you more money, why would you care about its expense ratio?" The answer, of course, is "You wouldn't--but they don't." Morningstar has found many times that fund expense ratios are, by far, the single most reliable predictor of future performance (higher fees = lower returns). As John C. Bogle liked to say, "You get what you don't pay for."
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
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