whatsmoney
Registered User
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- 91
Hi there.
If a fund advertises that it makes a 10% gain the previous year, is that 10% the value the fund has increased before or after managemnt fee and bid/offer spread are counted?
For example, if you invested in a fund that had a 1.5% management fee and a 5% bid/offer spread, does that mean that the fund in fact grew by 16.5%the previous year and then the fund managers took away their slice?
Or does it mean that your gain is 10% - 6.5%, ie 3.5% over the previous year?
If you are investing in such a fund, does it mean that the fund must grow by 6.5% before you get any return on the fund? If it grows by less, are you in fact losing money?
A very basic question i know, but something i want to clarify for myself, a novice!
If a fund advertises that it makes a 10% gain the previous year, is that 10% the value the fund has increased before or after managemnt fee and bid/offer spread are counted?
For example, if you invested in a fund that had a 1.5% management fee and a 5% bid/offer spread, does that mean that the fund in fact grew by 16.5%the previous year and then the fund managers took away their slice?
Or does it mean that your gain is 10% - 6.5%, ie 3.5% over the previous year?
If you are investing in such a fund, does it mean that the fund must grow by 6.5% before you get any return on the fund? If it grows by less, are you in fact losing money?
A very basic question i know, but something i want to clarify for myself, a novice!