Question:

When does ETF take out expense ratios?

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QID has an Expense Ratio of 0.95% .if I invest $1,000 in QID

1)how much they would deduct from my money?

2)how often they would deduct it?

3)how they would deweducted?

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2 ANSWERS


  1. Assuming that your $1000 invested stayed constant for one year.  That is, the fund's net asset value did not increase or decrease, the fund would deduct $9.50 from the value of your investment.  As one of your responders mentioned, the fund does pay a dividend.  It is currently about 0.84%.  So if that were to remain constant, the fund expenses would net out to what? $1.10 before taxes.  This particular fund however has dropped in value about 15% during the past year, so taking that into account if you had invested $1000 a year ago, it would now be worth about $850.  The expense ratio is calculated as the % of the average daily net assets, so you would have to know what the average daily net assets were in order to calculate the exact amount that would be deducted.


  2. I believe ETF's typically take the expense ratio out of dividends.  QID pays a quarterly dividend.  So the expense ratio is already deducted before dividend is calculated.  Not sure how they work that out if the expense ratio ever exceeds the dividend.

    The expense ratio does not drive price of shares, the markets do that.

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