From: bowgus 
Newsgroups: misc.invest.financial-plan
Subject: Re: Real Estate vs. Stocks
Date: Thu, 24 May 2007 04:03:28 -0500
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> They get 1% of assets under management.  Regardless
> of "profit" (where by "profit" you seem to mean
> "investment appreciation").  Comparing it the way
> you did makes no sense - it's, again, apples-and-oranges.
> Suppose it's an equity fund and it loses 5% on year.
> Guess what - the management company still gets their
> 1% because you are not paying them a percentage of
> the "profits".  You are paying them a percentage of
> the assets.  If you want to make your questionable
> calculation now, well, the percentage of "profits"
> looks pretty silly.

Sure, funds are "for profit" ... we are in complete agreement ...
except ... as an investor I'm not interested in apples, or
oranges, ... I am interested one thing only, and that is net return. I
understand that funds are less expensive in the US than up here but
here is a typical balanced fund I looked up that the average person
might select up here. Return over 3 years was 7.8% and the MER is
2.4%.

Using $1000 and 7.8% over 1 year.
Return is $78, fund net return is $25.87, holders net return is $52.13

Now consider this. ($52/$1000)*100 is ... 5.2%. There are GICs to be
had that return better than that, and with much less risk.