Carl_William
09-24-2005, 06:11 PM
Mutual Fund Expense Ratio – How is it applied?
Are mutual fund expense ratios prorated for dollar inputs at various times of the year?
I am sure they are, but I would like to know how this is done for a typical mutual fund company.
I presume they try to extract the expense ratio dollars in a fair manner.
A typical problem: For a new account, suppose a person inputs $100,000 into a fund on June 1, 2004, and takes out all of the money out on Sept 1, 2005 (money was in fund for one year and 3 months). If the expense ratio is one percent, would an expense of 1.25 percent somehow be applied to the money removed over the 15 month duration that the money was in the fund?.
Are mutual fund expense ratios prorated for dollar inputs at various times of the year?
I am sure they are, but I would like to know how this is done for a typical mutual fund company.
I presume they try to extract the expense ratio dollars in a fair manner.
A typical problem: For a new account, suppose a person inputs $100,000 into a fund on June 1, 2004, and takes out all of the money out on Sept 1, 2005 (money was in fund for one year and 3 months). If the expense ratio is one percent, would an expense of 1.25 percent somehow be applied to the money removed over the 15 month duration that the money was in the fund?.