[FAQ] Expense Ratios
Many would think that looking at expense ratio will enable us to know what as investors we are incurring when we look to vest in a fund. However there are costs that are excluded from expense ratio. Taken from a Fidelity report, the list below is not an exhaustive list of items excluded from expense ratio.
The following expenses are excluded from the calculation of the total expense ratio:
- Brokerage and other transaction costs and any associated reimbursements
- Performance fee
- Bank overdraft interest
- Stock lending fees
- Foreign exchange gains and losses
- Front or back-end loads arising from the purchase or sale of other funds (Sales Charges)
- Tax deducted at source or arising from income received
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