Your parents are seeking some advice from you concerning their retirement funds. Their accounts have been managed by XYZ firm which provides hundreds of mutual funds and other financial products. Most of your parents funds are allocated to a growth-oriented fund. According to the funds prospectus, this fund seeks to maximize the long-term potential for growth of principal and has a long-term investment time horizon. The average annual return since its inception in 2010 is 8.5%. There is another mutual fund using a similar strategy. It has a higher return of 10% during the same period. The second fund requires a load of 5%. Your parents ask you if it is a good idea to switch to the second fund.

What would you say to your parents?

Hint:

You may need do some research to get necessary information in order to provide an informed answer. For example, you may want to compare the funds return with that of the overall stock market performance during this same period.

It would be helpful to make up some numbers to give a numerical example.