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Understanding the Costs Involved in Mutual Fund Investments Bob is debating purchasing a mutual fund, but he has some questions for his financial advisor, Cho.
Understanding the Costs Involved in Mutual Fund Investments Bob is debating purchasing a mutual fund, but he has some questions for his financial advisor, Cho. The following table presents information on four different openend mutual funds that Bob and Cho are discussing. Use the information in the table to answer the questions that follow. BOB: After some research, I've narrowed it down to these four funds, but can you explain to me the relationship between b fees and fund performance? CHO: Generally, funds that charge b fees, such as MinT p do not necessarily grad outperform funds that do not charge these fees. BOB: What about frontend load fees? For example, suppose BRRT has a frontend load fee of when do I pay this fee? CHO: If you purchase shares of this fund at the NAV, you will pay a commission of but when you sell these shares you will pay in frontend fees. BOB: It sounds like these fees could start to add up What's the most I can expect to pay in fees? CHO: If a fund charges a frontend load and a b fee, then it can charge a maximum of only in backend load charges without violating the cap. BOB: Thanks! This was really helpful. So it sounds like you'd recommend looking for funds whenever possible. Understanding the Costs Involved in Mutual Fund Investments
Bob is debating purchasing a mutual fund, but he has some questions for his financial advisor, Cho. The following table presents information on four
different openend mutual funds that Bob and Cho are discussing. Use the information in the table to answer the questions that follow.
BOB: After some research, I've narrowed it down to these four funds, but can you explain to me the relationship between fees and fund
performance?
CHO: Generally, funds that charge fees, such as MinT p do not necessarily grad outperform funds that do not charge these fees.
BOB: What about frontend load fees? For example, suppose BRRT has a frontend load fee of when do I pay this fee?
CHO: If you purchase shares of this fund at the NAV, you will pay a commission of
but when you sell these shares you will
pay
in frontend fees.
BOB: It sounds like these fees could start to add up What's the most I can expect to pay in fees?
CHO: If a fund charges a frontend load and a fee, then it can charge a maximum of only
in backend load charges
without violating the cap.
BOB: Thanks! This was really helpful. So it sounds like you'd recommend looking for
funds whenever possible.
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