Question

A mutual fund holds $2.8million worth of assets and 560,000 number of shares issued at the beginning of the year. The mutual fund has 1.2% operating expenses and 0.5% 12b-1 fees. Expenses and fees are deducted from assets at the end of the year. At the end of the year, the assets held by the fund are worth $ 4.4m (before expenses) and there are 800,000 shares outstanding. Just before the end of the year, the fund realized $0.3m capital gains and received $0.2m dividends. What is the reported return on the fund?

EXCEL PLEASE

Answer 1

Formula	Time (T)	T = 0	T = 1
A	Assets	2,800,000	4,400,000
n	Shares	560,000	800,000
D1	Distribution		300,000
D2	Dividends		200,000
S = D1 + D2	Sum		500,000
TA = A1 + S	Total assets		4,900,000
E	Expense		1.20%
F	12b-1 fee		0.50%
Net asset = TA*(1 -(E+F))	Net asset	2,800,000	4,816,700
Net asset/n	NAV	5.00	6.02
(NAV1/NAV0) -1	Total return	20.42%

Return on the fund = 20.42%