The passive funds just track the indices. They don't require a huge amount of expensive staff to do that.
The more expensive funds are actively managed. That means that they have investment analysts and others researching, buying and selling shares. So this pushes up the AMC.
It comes in the form of a reduced investment performance. So if the underlying assets grew by 5% in a year and the AMC was say 1%, then the unit price will show a 4% growth. That's the simple explanation.
It comes in the form of a reduced investment performance. So if the underlying assets grew by 5% in a year and the AMC was say 1%, then the unit price will show a 4% growth. That's the simple explanation.
That doesn't sound correct. The AMC is charged on the full value of the fund whether it grows it not. Say my pension fund is worth €500k, the AMC is 1%, and there is zero growth in a year, then then the charge for that year is €5k reducing my fund to €495k.
That doesn't sound correct. The AMC is charged on the full value of the fund whether it grows it not. Say my pension fund is worth €500k, the AMC is 1%, and there is zero growth in a year, then then the charge for that year is €5k reducing my fund to €495k.
Isn't it the same as Conan mentioned with other words? In this case, assets grow by 0% in a year with AMC 1%, then the unit price will show a -1% growth (or 1% fall) as Conan mentioned. Would you please elaborate? I think I'm missing something.