While your advisors’ worth should be measured by the value they provide, ex. financial planning and the quality of their overall financial advice, the total fees and expenses you pay matter a lot (Investopedia link or Morningstar Active vs. Passive Barometer ). It’s easy to quantify the management fees charged by your advisor, however, the all-in fees and expenses of your mutual funds or Exchange Traded Funds (ETF) are far more difficult to quantify. That’s why we created our All-in Fees and Expense Fund Calculator below. Enter the data in our calculator to determine your fund’s estimated all-in fees and expenses. The results may surprise you!
At PNW Asset Management, our funds’ all-in fees and expenses average about 15/100ths of a percent per year, and we keep no portion of them. Plus we work hard to keep them low for you by selecting low-cost, low-turnover funds with minimal cash balances!
If your fund has a front end load (generally between 3% and 6% of the total amount invested) or back end load (a contingent deferred sales charge applied when you sell or redeem the fund), simply add the load cost to your fund’s all-in fees and expenses. But please DON’T buy mutual funds with sales loads!
Morningstar | Yahoo Finance | Marketwatch
NOTE: The cost of cash balances are estimated based on historical 10% annual returns of a 70% diversified stock and 30% high quality, short-term bond portfolio. Five percent in cash translates into 1/20th of a 10% return being unrealized. That’s one half of one percent, or 0.50%. Exact? Nope. But cash drag is a real cost that is often overlooked!
DISCLOSURE: Pacific Northwest Asset Management, LLC (hereinafter “PNW Asset Management”) is an investment adviser registered with Washington State. PNW Asset Management may not transact business in states where it is not appropriately registered, excluded or exempt from registration. Individualized responses to persons that involve either the effecting of transactions in securities, or the rendering of personalized investment advice for compensation, will not be made without registration or exemption.
The cost of a fund’s cash balance is calculated based on an approximate 10% multi-decade return on a 70/30 portfolio of broadly diversified stocks and bonds. Ex., 5% in cash would mean the fund would not earn 1/20th of the fund’s 10% compound annual long-term return, or 0.50%. Also, multiple unbiased sources reveal that 100% annual turnover equates to approximately 1.00% in annual unreported mutual fund or exchange traded fund costs. Please contact us for more information about our sources of a typical fund’s turnover costs.