. Assume you invest in an equity-oriented mutual fund with the following attributes (assume fees are paid annually in arrears): - NAV/share: $30 * no front-end load. Returns and NAV don't necessarily have to link up - Expense ratio: .75% - movement in NAV isn't always gonna tell you what the return of the MFs are gonna be . - 12b-1 fee: .5% 1.25 % a year ( paid at end of yr ) Lotta other things going on ( inc dist ) . . Over the next two years, the fund has the following returns and distributions (which are made on your investment's anniversary): Year 1 Year 2 Gross return 010% 6% CG distribution $1.00 $ .50 Div. distribution $1.00 $1.10 not inv's ! . What is the fund's NAV after two years? fees : (1-0.0125) 3 distributions Year 1: $30 x 1.1 x .9875 = $32.5875 - $2.00 = $30.5875 ($30.59) Ly comes to me as inv, but is paid out of the funds. Year 2: $30.59 x 1.06 x .9875 = $32.02 - $1.60 = $30.42 . Extra credit: assuming tax rates are 40% on dividends and 20% on capital gains, what is your approximate after-tax return