Besides comparing loads and 12b-1 fees, you can use a fund's expense ratio to get a sense of the fund's expenses. The expense ratio expresses as a percentage the amount of all operating expenses, including administrative expenses, management expenses, 12b-1 fees, etc, (but not sales loads) versus the fund's total assets. This number should be listed in both the fund's prospectus and its annual report.
A higher expense ratio does not necessarily mean that the fund is better managed. Larger funds typically have lower expense ratios than smaller funds because they enjoy lower transaction costs for higher volume trades. Index funds almost always have very low expense ratios since they have low management expenses and since they trade very little. On average, expense ratios are about 1.5%, which means that the average fund uses 1.5% of its assets to operate the fund.
A higher expense ratio does not necessarily mean that the fund is better managed. Larger funds typically have lower expense ratios than smaller funds because they enjoy lower transaction costs for higher volume trades. Index funds almost always have very low expense ratios since they have low management expenses and since they trade very little. On average, expense ratios are about 1.5%, which means that the average fund uses 1.5% of its assets to operate the fund.
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