Mutual Fund Operating Expenses?

I have been investing in Mutual Funds for several years. I always put money in, and never take it out. I have never seen a statement that indicated any amount of money being removed from my account for "operating expenses". But I know the Fund company collects somehow. Where do they get their money? When I withdrawl? Or do they take a little of the profits of the Funds themselves.

Depends on if it's front-loaded or back-loaded, which the literature should tell you. If front-loaded, they take their percentage out before investing it and if back-loaded, they take it out of the investment profits and you never see it.

check in the literature's

All mutual funds have internal operating expenses. These are "soft" charges and you never see them. Effectively, they reduce your rate of return. These charges are deducted every day in very, very, very small increments.

Operating expenses are important, but remember that the name of the game is net return.

Yes, they take profits of the fund themselves - and more than a little.

The mutual fund company's fees - and the fees of all other service providers to the fund such as custodians, mailing houses - are taken out every single day. This is done so the NAV of the fund won't take a big drop as it would if, say, 6 months fees were taken out all at once. Such a procedure would alert fundholders that, yes, the mutual fund company is getting paid bigtime. They take their fees in small increments every day in the hopes that nobody will notice.

Where do they get their fees from? The fund always has some cash available. Cash from recent interest & dividends paid by the securities the fund holds. Cash from new buyers of the fund.

Generally speaking, this pool of cash is not sufficient to pay the ongoing expenses on a daily basis. The mutual fund management team then looks to the proceeds of securities sales. For example, your fund has just sold 500,000 shares of stock. Proceeds will settle in the fund in 3 days. Some of these proceeds, usually, will be used for management expenses because income from interest & dividends is generally less than management fees, therefore the fund managers have to invade the capital.

How to find out about all this? Look in the semi-annual & annual financial statements of the fund. Examine total management fees & related management costs, examine total income from interest & dividends. Normally there will be a deficit. Then examine proceeds of securities
sold during the period. It is from these proceeds that the deficit will be made up.

None of this has anything to do with the load or non-load structure of the fund.

There are many other aspects of fund management greed that are concealed from the eyes of most investors.

Why would one buy mutual funds at all? The median mutual fund underperforms the relevant index and countless academic studies have proved this.

An alternative would be the numerous ETFs - exchange traded funds - that have ultra-low management expenses because they're based on indexes and run mostly by computers. They range from broad general ETFs to bond ETFs to specialized sector or geographic region ETFs.

It depends on if its a load fund or a no-load fund. If its a load fund with a froent end load, they would take money out of your contribution before it goes into the fund. Say you sent a check for a hundred dollars and the load was 4.75 percent, they would take $4.75 out and put $95.25 in the fund. Or it may be back loaded in which case when you take money out they will take a percentage then and send you the rest. There are some other variations with load funds as well. With a no-load fund they take fees out of the fund itself. That is reflected in the Net Asset Value of the shares. So, none of this shows up on your statement. Fees are very important. They add up and can considerably affect your return in the long run.

Mutual fund expenses.. LOL aren't they great!

Survey says...........depends options you have set. Most funds companies does collect when you withdraw. I money in a Washington's Mutual Investor Fund and they recieve a 5% comission on when i sell. Taking part of your profits is illegal and you could sue them.

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