Mutual Fund Loads, Fees and Other Expenses

Mutual fund fees are the costs of running a mutual fund. They are disclosed in the simplified prospectus. What investors don’t readily see or comprehend and aren’t readily explained by their salespersons is how the method of sale effects their ongoing trailer commissions and, of course, fund returns. The simplified prospectus does have a section “Impact of Sales Charges on Purchases of Mutual Funds,” showing the amount of loads you would pay under different purchase scenarios covering 1-, 3-, 5- and 10- year periods. (Firms assume a 5% growth rate in order to calculate the future years impact.)

A controversial study that found Canada’s fund fees are higher than 18 other countries has been a thorn in the side of the mutual fund industry ever since Peter Tufano, Ajay Khorana and Henri Servaes published it in 2006. Read the full article