No. of Recommendations: 0
Concentrating on the expense rate is a mistake. The real question is fund performance.

See http://www.vanguard.com/educ/lib/bogle/indexing.html for why the two are related.

Since the expense rate is built into the performance, when you compare the performance of two funds, you are including the expense rate in your comparison.

Well, yes and no. If you compare true bottom line performance -- gross profit less management fees less trading costs less taxes less marketing fees less loads -- then this would be true. However, I believe that most mutual funds, particularly in their advertisements, will tell you their gross percentage performance, excluding any and all costs. In other words, most mutual fund advertisements' performance numbers don't subtract out the expense ratio.

This is independent of the load, if any. I would never pay a load.

Agreed. The load is separate from the expense ratio.

Look at a chart, preferably one with dividends reinvested.

Not the best way to do it, IMHO. This ignores taxes and loads, which are two factors affecting the amount of money that ends up in your pocket. I would suggest getting the prospectuses from the respective funds, where the data to evaluate these two expenses can be found.

--malakito.
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