how are mutual fund fees PAID???

[familyguy1988]

Let us say a fund as a management fee of 2%, how is this paid to the manager? Do they liquidate some assets at the end of the year and thus suddenly reduce NAV in order to get their 2%? Do they do this regulary and the effect on NAV is not noticed?

 

[cdealbuquerque]

Mutual funds keep some cash at hand to handle redemptions, fees and in case a good investment opportunity occurs.
Many funds skim 1/12th of 2% each month,
Yes, the fees takes a toll on the NAV.
By the way, the 2% is not kept totally by management. A portion of that goes to dealers in the form of trailing fees.

 

[familyguy1988]

thank you for the answer and your time