By Richard Loth (Contact | Biography)

The Morningstar and Value Line fund reports have multi-year expense ratio data and information on load and 12b-1 charges. In the case of the latter, you have to search a bit for it in the Morningstar report. It appears at the very bottom of the report after the "Dist." caption.

The Value Line report makes the best comparative expense ratio presentation. On the line below a fund's historical expense ratio, Value Line indicates how the fund's expenses compare to its category average on a multi-year basis. The category average is deemed to equal 1. A figure greater than 1 signifies that the fund has higher-than-average expenses, while a figure below 1 represents proportionately lower expenses:

This is the entry we need to complete in the Fund Investment-Quality Scorecard for an analysis of a mutual fund's fees and expenses:



In looking for high investment quality in the area of fund fees and expenses, it is preferable to not find any sales or so-called distribution (12b-1) charges. Ideally, investors should find a fund with an expense ratio far below its category and peer group averages, with a trend over the past five years that is holding steady or, better yet, declining. In the "Summary Analysis," only funds with "low" or "below average" fees and expenses are going to be worthy of consideration.

Return to the Main Menu.
Proceed to the next chapter on Fund Performance Metrics.



Table of Contents
  1. Overview Of Mutual Fund Expenses
  2. Fund I-Q No.6: Costs and Expenses
  3. Scoring Fund Cost and Expense Data


comments powered by Disqus
Trading Center