Personal Finance

When does MER get deducted from Mutual Funds?

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  • Sep 2nd, 2007 9:28 pm
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[OP]
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Dec 23, 2006
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When does MER get deducted from Mutual Funds?

Is it done on an ongoing basis? Or does it all get deducted when I withdrawl? I'm just wondering if my current account balance is my "real balance".
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Jun 19, 2006
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Accrued daily. When the actual cheque is cut to the fund manager depends on the contract between the mutual fund trust itself, and the management company appointed to manage the fund.
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Jul 31, 2007
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neverdoanything wrote:
Sep 2nd, 2007 2:58 am
Is it done on an ongoing basis? Or does it all get deducted when I withdrawl? I'm just wondering if my current account balance is my "real balance".
It gets deducted yearly (not at withdrawal) but I don't know whether there is a particular day where suddenly your value goes down 2% or if it's a kind of continuous withdrawal. Maybe some eone else knows.
I'm not overweight, I'm undertall.
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danielcarrera wrote:
Sep 2nd, 2007 3:55 am
It gets deducted yearly (not at withdrawal) but I don't know whether there is a particular day where suddenly your value goes down 2% or if it's a kind of continuous withdrawal. Maybe some eone else knows.
As I said up-thread, the accrual is daily. Otherwise, somebody who wants to buy into the fund might be paying too little, or too much for the management fees of the fund.

Imagine paying a whole years worth of management fees because you bought at Christmas!
[OP]
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Dec 23, 2006
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pitz wrote:
Sep 2nd, 2007 6:19 am
As I said up-thread, the accrual is daily. Otherwise, somebody who wants to buy into the fund might be paying too little, or too much for the management fees of the fund.

Imagine paying a whole years worth of management fees because you bought at Christmas!
You say it's accrued daily, is it also deducted daily?
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neverdoanything wrote:
Sep 2nd, 2007 2:21 pm
You say it's accrued daily, is it also deducted daily?
Well, the funds' accountants obviously doesn't cut a cheque each and every day, but the management fee is accrued and deducted from the NAV on a daily basis from the fund.
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May 15, 2007
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To cover the MERs a sum is deducted from each pool of fund assets on a daily basis. This approach ensures there will not be a large impact on the net asset value of the fund, as would occur if the amount were deducted in one lump sum.

These transactions will not appear as deductions from your individual holdings, nor will they appear on your statement of account activity.

I think :|
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bs9999 wrote:
Sep 2nd, 2007 9:03 pm
To cover the MERs a sum is deducted from each pool of fund assets on a daily basis. This approach ensures there will not be a large impact on the net asset value of the fund, as would occur if the amount were deducted in one lump sum.
correct, this is the accrual activity that pitz mentioned. it's irrelevant how often the mgmt fee is actually paid as the daily mgmt fee accrual is the only thing that affects the NAV of the fund.

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