Consider a no-load mutual fund with $200 million in assets and 10 million shares at the start of the year and with $250 million in assets and 11 million shares at the end of the year. During the year investors have received income distributions of $2 per share and capital gain distributions of $.25 per share. Assuming that the fund carries no debt, and that the total expense ratio is 1%, what is the rate of return on the fund?

Question

Quizplus · Accepted Answer

NAV₀ = $200/10 = $20.00 NAV₁ = [$250 - ($250 × .01)]/11 = $22.50 Gross return = ($22.50 - $20 + $2 + $.25)/$20 = 23.75%

Consider a No-Load Mutual Fund with $200 Million in Assets