Disclaimer: I am going to mention the investment company that I am using, but I am not related in any way with this company, is just to exemplify my question.

I am currently using foliofn.com. They charge $290 per year, for unlimited window trading. You can trade ETF, Mutual Funds, Stocks and others. I am trying to find what is my effect percentage fee for my investment. If I pay 290 per year, and I have 10K in investments (example), the normal calculation will be

290/10,000 = 0.029 = 2.9%

Now, the problem is that I have heard that mutual funds have their own fees, so if I have a mutual fund on my portfolio, then how I will make this calculation?

I guess there are two questions in this essay:

(1) Is my assumption of $290/10K = 2.9% correct?
(2) How do I calculate additional fees within my portfolio to know my effective fee rate?



The fees that the funds charge would be explained in their respective prospectuses.

With the other question, you're correct.


You calculated correctly the part of your expenses owing to the flat annual fee charged by your financial institution, 2.9%.

If you invest in a mutual fund having an expense ratio of 0.75% (for example), then you have to add that percentage to the base 2.9% to get the total expense ratio.

I have to point out that 3% or more is an absurdly high expense ratio.

  • Thanks for the pointer. I have been working hard to reduce my expense ratio, but I always find a "good" reason to spend my money somewhere else :(. I will work on 2011, on reducing that expense ratio. – Geo Jan 3 '11 at 3:34

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