Understanding the Costs Involved in Mutual Fund Investments Van is debating purchasing a mutual fund, but he has some questions for his financial advisor, Amy. The following table presents information on four different open-end mutual funds that Van and Amy are discussing. Use the information in the table to answer the questions that follow. FUND NAV NET CHG YTD % RET MinT p 17.32 0.03 3.0 PwrSL r 15.77 0.13 5.9 MRGG MajTrk 40.81 0.27 8.4 39.21 0.36 9.5 VAN: 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? AMY: Generally, funds that charge 12b-1 fees, such as MinT p, outperform funds that do not charge these fees. VAN: What about front-end load fees? For example, suppose MajTrk has a front-end load fee of 6%, when do I pay this fee? AMY: If you purchase 100 shares of this fund at the NAV, you will pay a commission of $ pay $ in front-end fees. but when you sell these shares you will VAN: It sounds like these fees could start to add up. What's the most I can expect to pay in fees? AMY: If a fund charges a 2.5% front-end load and a 2.5% 12-b1 fee, then it can charge a maximum of only charges without violating the cap. VAN: Thanks! This was really helpful. So it sounds like you'd recommend looking for % in back-end load funds whenever possible.