| 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
|
| 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?
|