Mutual Funds/Expense Ratio



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.

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.


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Warren Boroson


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.


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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