Scoring Fund Cost and Expense Data
AAA
  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
RELATED TERMS
  1. Multibank Holding Company

    A company that owns or controls two or more banks. Mutlibank ...
  2. Short Put

    A type of strategy regarding a put option, which is a contract ...
  3. Wingspread

    To maximize potential returns for certain levels of risk (while ...
  4. Volatility Smile

    A u-shaped pattern that develops when an option’s implied volatility ...
  5. Nadex

    Nadex stands for the North American Derivatives Exchange, a regulated ...
  6. Exchange-Traded Binary Options

    Exchange-traded binary options, regulated by the CFTC, let you ...
  1. What is the difference between a short position and a short sale?

    Learn how short selling and short positioning are different, specifically in regards to the nature of the commodity being ...
  2. Are there any risks involved in trading put options through a traditional broker?

    Explore put option trading and different put option strategies. Learn the difference between traditional, online and direct ...
  3. What is a volatility smile?

    Discover what options traders mean when they refer to a "volatility smile," and learn why a volatility smile's existence ...
  4. Is short selling ethical?

    Understand the concept and practice of short selling, and examine the ethical questions that some investors raise in regard ...

You May Also Like

Related Tutorials
  1. Options & Futures

    Binary Options Tutorial

  2. Mutual Funds & ETFs

    Top ETFs And What They Track: A Tutorial

  3. Active Trading Fundamentals

    Introduction to Stock Trader Types

  4. Options & Futures

    Options Pricing

  5. Options & Futures

    How To Place A Covered Call Strategy With optionsXpress

Trading Center