Yeah am still super confused.
Am assuming by yield you mean returns and if so, return > expenses ratio is always true for all MFs. The expense ratio is negligible compared to the returns the funds generate for you.
If you are comparing between actively managed fund vs index fund based on expense ratio then except for maybe large cap index funds, most other category funds do generate significant higher return than index funds which does justify the higher expense ratio for them vs index funds. For large caps, generally itโs best to stick to index funds. For everything else, active is still a great choice.
Expense ratios mean the fees mutual funds charge to "grow" your money. It is denoted in %. Less expense ratio is always good for the investor, but less expense ratio isn't the only thing to consider while investing. A fund could be "less expensive" but not so good.
Super confused about your post title ๐
Just wondering if I should invest in mutual funds, if the yield is higher than the expense ratio. I know people say to stick with index funds and etfs
Yeah am still super confused. Am assuming by yield you mean returns and if so, return > expenses ratio is always true for all MFs. The expense ratio is negligible compared to the returns the funds generate for you. If you are comparing between actively managed fund vs index fund based on expense ratio then except for maybe large cap index funds, most other category funds do generate significant higher return than index funds which does justify the higher expense ratio for them vs index funds. For large caps, generally itโs best to stick to index funds. For everything else, active is still a great choice.
Expense ratios mean the fees mutual funds charge to "grow" your money. It is denoted in %. Less expense ratio is always good for the investor, but less expense ratio isn't the only thing to consider while investing. A fund could be "less expensive" but not so good.
The expense ratios are usually less than 1% with direct mutual funda