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One notable component of the expense ratio of U.S. funds is the "12b-1 fee", which represents expenses used for advertising and promotion of the fund. 12b-1 fees are paid by the fund out of mutual fund assets and are generally limited to a maximum of 1.00% per year (.75% distribution and .25% shareholder servicing) under FINRA Rules.
For example, if you made a one-time investment of $10,000 in a fund with a 1 percent expense ratio and earned the market’s average return of 10 percent annually over 20 years, it would cost you ...
The Vanguard Dividend Appreciation Index Fund ETF uses the S&P Dividend Growers Index for its benchmark. As one of the largest mutual fund and ETF companies in the industry, Vanguard has a long ...
Low expense ratio: The VTI sports a rock-bottom expense ratio of 0.03%. Decent yield : It offers a 30-day SEC yield of 1.35%, which is an average yield among U.S. dividend-paying equities.
The expense ratio of a stock or asset fund is the total percentage of fund assets used for administrative, management, advertising (12b-1), and all other expenses. An expense ratio of 1% per annum means that each year 1% of the fund's total assets will be used to cover expenses. [ 1 ]
The total expense ratio (TER) is a measure of the total cost of a fund to an investor. Total costs may include various fees (purchase, redemption, auditing ) and other expenses. The TER, calculated by dividing the total annual cost by the fund's total assets averaged over that year, is denoted as a percentage.
Expense ratio: 0.20 percent Vanguard Growth ETF (VUG) This ETF tracks the performance of the CRSP US Large Cap Growth Index, a collection of stock representing the growth stocks among U.S. large-caps.
The expense ratio equals recurring fees and expenses charged to the fund during the year divided by average net assets. The management fee and fund services charges are ordinarily included in the expense ratio. Front-end and back-end loads, securities transaction fees, and shareholder transaction fees are normally excluded.