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I'm considering an actively managed bond fund (DODIX) versus an similar index fund (VBMFX). Both are high quality intermediate funds. The 10-year return of DODIX (exp ratio 0.43%) is 0.86% higher than VBMFX (exp ratio 0.22%). When financial research companies show 10 year returns (example image below), does the return include the amount deducted from expense ratios? If that is the case, would the yield advantage of DODIX be the entire 0.86%? Or do expense ratios need to be considered resulting in a DODIX yield advantage of 0.65% (0.86% -0.43% + 0.22%)? Thanks

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  • Can ask this poster. money.stackexchange.com/questions/5462/… – DumbCoder Jan 16 '11 at 15:23
  • In my experience the Dodge & Cox funds are phenomenal. Having said that, I soon as I recommended one (the international fund) to a friend it tanked (along with the rest of the market). – Esteban Araya Jan 19 '11 at 0:14
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The published yields include the expense fees.

Be careful when looking at funds to look beyond the historical performance. Read and understand the prospectus and holdings of the fund when you're looking at a new investment.

In this case, the Dodge & Cox fund is looking to provide the highest income possible, including corporate, US agency (SBA, GNMA) and treasury positions. The Vanguard Total Bond attempts to expose you to the entire bond market, which happens to be dominated by US treasury securities. Both are good funds, but have slightly different weaknesses and strengths.

  • confirming, so are you saying that when funds post the returns they are after taking the expense ratio into account? E.g., lets say total principal was $100, this grew into $110 end of year, the fund pocketed $1 in expenses. The net return advertised should be $9/$100*100 = 9%. Is that an accurate statement? – morpheus Nov 12 '16 at 17:22

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