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

Scoring Fund Cost and Expense Data

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.

  1. Overview Of Mutual Fund Expenses
  2. Fund I-Q No.6: Costs and Expenses
  3. Scoring Fund Cost and Expense Data
  1. Put-Call Parity

    A principle that defines the relationship between the price of ...
  2. Maturity

    The period of time for which a financial instrument remains outstanding. ...
  3. Employee Stock Option - ESO

    A stock option granted to specified employees of a company. ESOs ...
  4. Implied Volatility - IV

    The estimated volatility of a security's price.
  5. Plain Vanilla

    The most basic or standard version of a financial instrument, ...
  6. Normal Profit

    An economic condition occurring when the difference between a ...
  1. How do hedge funds use equity options?

    With the growth in the size and number of hedge funds over the past decade, the interest in how these funds go about generating ... Read Full Answer >>
  2. Can mutual funds invest in options and futures?

    Mutual funds invest in not only stocks and fixed-income securities but also options and futures. There exists a separate ... Read Full Answer >>
  3. How does a forward contract differ from a call option?

    Forward contracts and call options are different financial instruments that allow two parties to purchase or sell assets ... Read Full Answer >>
  4. What are the main risks associated with trading derivatives?

    The primary risks associated with trading derivatives are market, counterparty, liquidity and interconnection risks. Derivatives ... Read Full Answer >>
  5. How can an investor profit from a fall in the utilities sector?

    The utilities sector exhibits a high degree of stability compared to the broader market. This makes it best-suited for buy-and-hold ... Read Full Answer >>
  6. What is the difference between derivatives and options?

    Options are one category of derivatives. Other types of derivatives include futures contracts, swaps and forward contracts. ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Ex Works (EXW)

    An international trade term requiring the seller to make goods ready for pickup at his or her own place of business. All ...
  2. Letter of Intent - LOI

    A document outlining the terms of an agreement before it is finalized. LOIs are usually not legally binding in their entirety. ...
  3. Purchasing Power

    The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing ...
  4. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  5. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  6. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!