Understanding the Costs Involved in Mutual Fund Investments Charles is debating purchasing a mutual fund, but he has some questions for his financial advisor, Dina. The following table presents information on four different open-end mutual funds that Charles and Dina are discussing. Use the information in the table to answer the questions that follow. FUND NAV NET CHG YTD % RET GlbEx p 20.32 0.04 2.9 TmRE r 17.77 0.14 5.8 MRGG 28.81 0.28 8.3 BRRT 37.21 0.37 9.4 CHARLES: After some research, I've narrowed it down to these four funds, but can you explain to me the relationship between 12b-1 fees and fund performance? DINA: Generally, funds that charge 12b-1 fees, such as GlbEx p, outperform funds that do not charge these fees. CHARLES: What about front-end load fees? For example, suppose BRRT has a front-end load fee of 8%, when do I pay this fee? DINA: If you purchase 100 shares of this fund at the NAV, you will pay a commission of $ will pay $ in front-end fees. CHARLES: It sounds like these fees could start to add up. What's the most I can expect to pay in fees? but when you sell these shares you DINA: If a fund charges a 2% front-end load and a 2% 12-b1 fee, then it can charge a maximum of only without violating the cap. CHARLES: Thanks! This was really helpful. So it sounds like you'd recommend looking for % in back-end load charges funds whenever possible. FUND NAV NET CHG YTD % RET GlbEx p 20.32 0.04 2.9 TmRE r 17.77 0.14 5.8 MRGG 28.81 0.28 8.3 BRRT 37.21 0.37 9.4 CHARLES: After some research, I've narrowed it down to these four funds, but can you explain to me the relationship between 12b-1 fees and fund performance? DINA: Generally, funds that charge 12b-1 fees, such as GlbEx p, outperform funds that do not charge these fees. CHARLES: What about front-end load fees? For example, suppos do not necessarily nd load fee of 8%, when do I pay this fee? always DINA: If you purchase 100 shares of this fund at the NAV, you will pay a commission of $ but when you sell these shares you will pay $ in front-end fees. CHARLES: It sounds like these fees could start to add up. What's the most I can expect to pay in fees? DINA: If a fund charges a 2% front-end load and a 2% 12-b1 fee, then it can charge a maximum of only without violating the cap. CHARLES: Thanks! This was really helpful. So it sounds like you'd recommend looking for % in back-end load charges funds whenever possible. FUND GlbEx p 20.32 NAV NET CHG YTD % RET 0.04 2.9 TmRE r 17.77 0.14 5.8 MRGG 28.81 BRRT 0.28 8.3 37.21 0.37 9.4 CHARLES: After some research, I've narrowed it down to these four funds, but can you explain to me the relationship between 12b-1 fees and fund performance? DINA: Generally, funds that charge 12b-1 fees, such as GlbEx p, outperform funds that do not charge these fees. CHARLES: What about front-end load fees? For example, suppose BRRT has a front-end load fee of 8%, when do I pay this fee? DINA: If you purchase 100 shares of this fund at the NAV, you will pay a commission of $ will pay $ in front-end fees. , but when you sell these shares you low-load CHARLES: It sounds like these fees could start to add up. What's the most I can expect to front-end load DINA: If a fund charges a 2% front-end load and a 2% 12-b1 fee, then it can charge a m without violating the cap. no-load % in back-end load charges back-end load CHARLES: Thanks! This was really helpful. So it sounds like you'd recommend looking for funds whenever possible.