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  Tuesday November 21, 2017

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OTHER FEES CHARGED BY NO-LOAD FUNDS
Learn even more about this topic with the Encyclopedia of Personal Finance™

"No-load" does not mean "no fee." No-load funds may charge fees other than sales charges. Some of these fees make up for the lack of sales charges.

Below are some of the other fees a no-load fund may charge:

Maintenance fee?This fee covers the costs of maintaining accounts. It covers dividend statements and periodic reports, among other things. Most maintenance fees are $10 per year.

Transaction fee?This fee covers the costs of investing the money in securities for the fund.

Management fee?This fee is charged to compensate those who run the fund's portfolio. It rarely exceeds one percent of the fund's assets.

12b-1 fees?These fees cover marketing, advertising, and distribution costs. They are called "hidden loads" by many, because they cover some costs that sales loads normally cover.

Redemption fee?This is a charge imposed when investors sell shares back to the fund. Other names for these charges are back-end loads, exit fees, and deferred sales loads. True no-load funds do not charge redemption fees, because these fees are technically sales loads.

Before you choose a fund based on sales charges, you should know what each one offers you. On the next page, we will discuss that.




LEARN EVEN MORE WITH THE ENCYCLOPEDIA OF PERSONAL FINANCE. CLICK HERE!

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