Question

A no-load mutual fund starts the year with $309 million in net assets and 22 million shares outstanding. It ends the year with $337 million in net assets, and 29 million shares outstanding. The fund made dividend distributions of $1.6 per share and capital gains distributions of $1.2 per share during the year. What was the rate of return on the fund for the year?

Answer 1

2.63%

Step-by-step explanation:

Net assets at beginning is $309 million & shares outstanding is 22 million, then net asset per share is $14.05

Net assets at year end is $337 million & shares outstanding is 29 million, then net asset per share is $11.62

⇒Net asset per share reduced $2.43

The total gain/ loss per share in year included Net asset per share reduced $2.43 + dividend distributions of $1.6 per share + gains distributions of $1.2 per share

= -2.43+1.6+1.2 = $0.37

the rate of return on the fund for the year is 2.63% = 0.37/14.05