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Conference nyoss1::market_investing

Title:Market Investing
Moderator:2155::michaud
Created:Thu Jan 23 1992
Last Modified:Thu Jun 05 1997
Last Successful Update:Fri Jun 06 1997
Number of topics:1060
Total number of notes:10477

146.0. "Management Fees" by STAR::BOUCHARD (The enemy is wise) Tue Apr 07 1992 03:10

    Could somebody tell a novice investor what the "average" management fee
    for a domestic, no-load growth fund would be?  How much do these management
    tend to vary from fund to fund?
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146.1MR4DEC::BMCWILLIAMSImprovise if you have to ...Tue Apr 07 1992 16:0311
    According to the 2/17/92 issue of Business Week, the average mutual
    fund expense is currently 1.34% ($1.34 per $100). I believe that such
    expenses (management fees, legal fees, administrative costs) are above
    and beyond the "load" charges. If you look at a listing of mutual funds
    such as BW's or MOney's, you'll see quite a wide variation of fees:
    some less that 1 percent, others approaching 3 percent. I don't know if
    there's a good explanation for the variation, although index funds and
    other low-volatility funds seem to carry lower fees, while funds with
    high portfolio turnover may run on the high side for expenses.
    
    Brian
146.2AlsoSTAR::PARKETrue Engineers Combat ObfuscationTue Apr 07 1992 16:466
There may be other, such as 12b-1 "advertising" fees, which depending
on the "report" may or may not be included in the management fee
summary.

No I did not read the BW article.

146.3on the other endSLOAN::HOMTue Apr 07 1992 17:287
The Vanguard SP500 fund that's available throught the SAVE program
has a management fee  of 0.11%.

That has got to be the best that I've ever seen anywhere.

Gim

146.4Hear but do not necesarily listenCHESS::KAIKOWWed Apr 08 1992 01:5125
The "average" fee depends on the type of fund.

The more aggressive style, the higher the expense ratio is (usually).

Some mutual fund families tend to have lower expense ratios on comparable funds 
than similar funds in other families.

1. Pick the type(s) of fund you wish to invest in, i.e. balanced, international,
   regional, sector, growth and income, growth, aggrssive growth, etc.

2. Look at the most recent summaries in Business Week, Money, Changing Times,
   Forbes, etc.

3. Look at the long term record, not just the expense ratio.

4. Look at the trend of expenses year to year. If they start to rise, ask why?

5. Look at the trend of turnover year to year. If it rises, is there a 
   corresponding improvement in performance?

6. Etc.

7. Most importantly, don't listen to any of us in this conference!
   After all, if we knew the secret to successful investing would we still 
   likely be working for a salary?
146.5VMSDEV::HAMMONDCharlie Hammond -- ZKO3-04/S23 -- dtn 381-2684Wed Apr 08 1992 20:033
      International  funds  tend  to  have  significantly higher expense
      ratios that similar funds that invest  only  in  us  stocks/bonds.
      This reflects the higher cost of doing business around the world.