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Cost basis includes the purchase price along with any associated brokerage fees and commissions. Methods to calculate cost basis. The cost basis for stocks and mutual funds is generally the price ...
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. [7]
Often the management fee is initially based on the total investor commitments to the fund (i.e., the fund size) as investments are made. After the end of the commitment period, ordinarily four–six years, the basis for calculating the fee will change to the cost basis of the fund, less any investments that have been realized or written-off.
The commission that the agent receives is usually a percentage of this figure, although some firms like Merrill Lynch use figures called Production Credits, usually smaller than GDC, to determine payouts and retain more revenue. For example, a mutual fund with a 5.75% sales charge is sold to someone who invests $10,000.
For stocks or bonds, the cost basis is To figure out whether you need to report a gain -- or can claim a loss -- after you sell, you must start with the cost basis for that investment. Your Taxes ...
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. It will normally vary somewhat from ...
The cost basis for stocks and mutual funds is generally the price you paid when you purchased the asset, plus any other trading costs. However, there are several methods to calculate cost basis ...
Low-cost index funds vs. ETFs vs. mutual funds You can buy low-cost index funds as either an ETF or a mutual fund, and well-known indexes such as the S&P 500 will have both available. The list ...