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Understanding the Costs Involved in Mutual Fund Investments Jacques is debating purchasing a mutual fund, but he has some questions for his financial advisor, Kyoko.

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Understanding the Costs Involved in Mutual Fund Investments Jacques is debating purchasing a mutual fund, but he has some questions for his financial advisor, Kyoko. The following table presents information on four different open-end mutual funds that Jacques and Kyoko are discussing. Use the information in the table to answer the questions that follow. NAV FUND Mint IntRA NET CHG -0.04 YTD % RET 2.8 13.32 29.77 37.81 0.06 5.7 PFIN 8.2 0.20 0.29 Trik 38.21 9.3 JACQUES: 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? KYOKOL Generally, funds that charge 12.1 lees, such as MinTD. outperform funds that do not charge these fees JACQUES: What about front-end load fees? For example, suppose Majik has a front-end load free of 64, when do I pay this fee? KYOKO: 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 JACQUES: It sounds like these fees could start to add up. What's the most I can expect to pay in fees? KYOKO: If a fund charges a 4% front-end load and a 2.5% 12-b1 fee, then it can charge a maximum of only charges without violating the cap. % in back-end load JACQUES: Thanks! This was really helpful. So it sounds like you'd recommend looking for funds whenever possible

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