5 Replies to “how does mutual fund get money for their functioning ?”

  1. There are administrative fees. Check the fine print. Some MFs that are part of a company sponsored 401(k) are truly “no load” and free of all or most fees.

  2. For a no load fund instead of taking a fee when investors make contributions or sales the fees are taken from the fund as a whole.

  3. An annual fee is charged to the fund whether you exit in one year or three years. The one year clause is over and above the annual fee charged.

    Have a nice day

  4. the fund charges the investor the money in way of internal expenses, administrative and marketing expenses, The NAV is calculated after taking in all these.

    To keep the AMCs in check and ensure they dont charge exorbitant amount as the expenses, the regulatory authorities have rule that ensure the following

    1. The expense ratios are within a limit (around 2%)
    2. They are clearly explained to the investors in a transparent way

    you should look at the expense ratio of a fund while judging its performance

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