Question

The NAV of a mutual fund is $10 per share. You invest $100,000 in the fund. The front end load is 2%. The investment return of the fund for the year was 10%. You sell your shares. The redemption fees is 3% and the expense ratio is 4%. What is your return from this mutual fund investment?

Answer 1

NAV of the mutual fund per share	$                   10.00
Investment	$         100,000.00
Frontend load	2%
Frontend load	100000*2%	$          2,000.00
Amount invested=	100000-2000	$        98,000.00
Investment return	10%
Expense ratio	4%
Return net of expense	6%
The amount at the end of the year	98000*(1+6%)
The amount at the end of the year	$         103,880.00
Redemption fee	3%
Redemption fee	103880*3%	$          3,116.40
Amount redeemed after redemption fee	103880-3116.40	$     100,763.60
Return from mutual fund investment=	(100763.60-100000)*100/100000
Return from mutual fund investment=	0.7636%