Which of the following is true about MERs?

Question

Quizplus · Accepted Answer

Studies have shown that mutual funds with lower MERs tend to have higher returns than those with higher MERs. Therefore, it is beneficial for investors to choose a mutual fund with a lower MER to maximize their returns. Option A is incorrect because MERs typically include other expenses such as administrative and operating costs. Option C is incorrect because MERs can vary depending on the type of mutual fund, with actively managed funds typically having higher MERs than passive/index funds. Option D is partially correct, as subtracting the MER from the posted return can give an idea of net performance, but other factors such as taxes and inflation should also be considered.

Which of the Following Is True About MERs