Fund mgmt fee.........1% of what?

[PubMan]

Well it's really only what's available in the US that makes me envious; nowhere else in the world comes close - even in the UK 1% is typical of index trackers.

Plenty of ETFs on the European markets with mgt fees of 0.35%-0.4%

 

[hattrick_12a]

1% of the full value of the fund normally charged daily - i.e. c. 1%/356 reduction in the value of each unit of the fund to cover this cost.

Why is this not credible? Remember that the better the fund performs the more remuneration for the fund managers.

Charged Daily?

Without doing the calculation, this would seem like alot. Sorry I jsut can't get my head around how anyone can make money at this game, unless maybe you are dealing in the 100k's.

For simplicity lets say a fund did not grow at all. Would the fund provider be making 1% of the initial investment every day of that year. Seems alot to me?

Anyone know how to calculate this kind of thing if the fund grew? To the average punter, how do they know what they are getting?

QL state that the charge is 1% or 1.5%. So they pay their people out of this plus whoever looks after there funds, but is this charged daily. Is this simple in anyones mind?

Please try and explain...

 

[Del3D]

No 1/365th of 1%, charged on a daily basis - so, 1% total anually. This 1% would be charged on your principle investment and any gains for that year.

 

[hattrick_12a]

Thanks Del3D

 

[ClubMan]

Just to note that I did say exactly the same thing in my first post earlier:

1% of the full value of the fund normally charged daily - i.e. c. 1%/365 reduction in the value of each unit of the fund to cover this cost.

Why is this not credible? Remember that the better the fund performs the more remuneration for the fund managers.

 

[darag]

Plenty of ETFs on the European markets with mgt fees of 0.35%-0.4%

Sure but I was talking about what they call "mutual funds" in the US or unit funds here or in the UK. In a previous post, I explained the extra costs involved in buying ETFs directly.