Mutual Funds/Expense Ratio

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Question
Hello:

I understand that mutual fund expenses are taken from the net asset value (NAV) of a mutual fund.
If a mutual fund has an annual expense ratio of 0.70%, what percentage is taken from the NAV daily throughout the year?

I thank you for your reply.

Answer
Sorry to be dilatory about answering your question, but I had written to the ICC asking for a reply--and never received one.

I understand that expenses are subtracted from the nav every day--every day that the stock market is open. That's around 245 days. So, around 0.002857% is subtracted every day the market is open if the expense ratio is 0.70%. (That times 245 is 0.69999.)

I hope this helps.

Warren

Mutual Funds

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Warren Boroson

Expertise

Author of "Keys to Investing in Mutual Funds" (Barrons), "Ultimate Mutual Fund Guide" (Probus), "How to Pick Stocks Like Warren Buffett" (JKLasser), and "The Reverse Mortgage Advantage" (McGraw-Hill). Former financial columnist for Gannett News Service.

Experience

Author of 20 books; winner of 1996 Personal Finance award from Investment Company Institute and Washington University. Formerly on staffs of Money and Sylvia Porter's Magazine. Had a radio program (on WEVD) about mutual funds and a newsletter, FundDigest.

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