ETFs (Exchange Traded Funds) are great investments due to their low management fees and flexibility. However, many new investors forget that even ETFs can have high expense ratios and have great potential to eat away at your profits overtime.
Meet Fund Analyzer
Fund Analyzer is a website made by the FINRA (financial industry regulatory authority) that calculates and compares fund expenses. This is an excellent tool to use if you are searching for any fund to buy and hold for a long period of time. The analyzer breaks down funds costs for the investor and shows the following:
- Front-End Loads (fees upon purchase)
- Redemption Expenses (fees for early checkout)
- Annual Operating Expenses (operational costs)
- Back-End Loads (exit fees)
- Additional Account Costs
To use the analyzer: Simply search for a fund by typing the stock ticker symbol or the full name that you are looking for. Select your fund or find additional funds to compare the fund to. Once the fund(s) are selected, select “ANALYZE” at the top right of the screen and view the results! There are advanced search options, but the base example they give is preset on an initial contribution of $10,000, rate fo return set at 5.00%, and holding period set for 10 years– you can change this if you like depending on what you are looking for.
The analyzer gives ratings based from MorningStar. The “fee category” shows a vivid graph of comparable funds that range in the same field as your investment funds (you can click the graph dots and find other funds in the same expense ratios).
The Fund Analyzer is also a recommended tool to use by the SEC to deliver appropriate information for investors and awareness of brokerage fees. This analyzer is a simple way to work smarter, not harder.
Personally, I wish I would have found this analyzer before I started investing. A majority of my portfolio consists of ETFs and it’s important to understand how much fund expenses will cost you overtime. I definitely suggest this to be a tool for you to use on a daily basis or when you find it necessary to rebalance your stock portfolio.
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Information Attained: FundAnalizer.com
This blog is not a paid advertisement from any financial institution or the owners from Fund Analyzer and I was not paid prior to writing this post.