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Cost_analysis

A simple analysis which can give an insight on how cost can impact your return. we imagine 2 situations where we have 3 different annual costs( 0.05%,1% and 3%) and an investement period of 30 years:

a deterministic one in which we assume each year the return of a fund i 8%, very unrealistic but it makes us understand the impact of annual fees

a monte-carlo simulation, generating for each cost assumption and for each year 10000 random returns from a student t distribution

Especially in the second case we can perceive how much an annual cost can make the difference looking at the mean and standard deviation of all the 10000 paths for each annual fees case.

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Annual costs impact on a fund

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