What are all different charges made when we invest in mutual funds?

hi i am new to mutual funds can any body tell me what are all different charges made when we invest in mutual funds...please provide me the details of all the charges

Entry Load - upto 2.25% (can be saved completely if you invest directly to MF company without any agent)
Exit Load - upto 1 % if invested for less then mentioned time (can be saved completely if invested for more then mentioned time)
Management expenses -- upto 2.5%, deducted daily proportionately & adjusted in NAV (no way to save this charge)

The normal charges in a mutual fund are
1. Entry load
2. Exit load

entry load is usually 2.25% of your investment amount and exit load is usually 1% of the amount. If you keep your money invested for more than a year then you need not pay any exit loads.

To know more about mutual funds visit: http://anandvijayakumar.blogspot.com/2008/10/what-is-mutual-fund.html

Cheers,
Anand
http://anandvijayakumar.blogspot.com
mail me at anandvijayakumar@ymail.com if you need any more details.

You have to pay the entry load when you enter by purchasing the mutual fund. This will be upto a max of 2.5% of the amount you are investing

It depends upon the types of funds and accordingly the charges are applicable.
but in general administrative charges are applicable to all most all types of mutual funds.
When you sell such funds after the lock-in-period then some brokerage is charged by the broker through whom you will purchase such fund.

It may plz note that no heavy charges are applicable unlike purchase of other Shares and securities.

Invest Wisely:
An Introduction to Mutual Funds

Over the past decade, American investors increasingly have turned to mutual funds to save for retirement and other financial goals. Mutual funds can offer the advantages of diversification and professional management. But, as with other investment choices, investing in mutual funds involves risk. And fees and taxes will diminish a fund's returns. It pays to understand both the upsides and the downsides of mutual fund investing and how to choose products that match your goals and tolerance for risk.

This brochure explains the basics of mutual fund investing â€” how mutual funds work, what factors to consider before investing, and how to avoid common pitfalls.

Key Points to Remember
Mutual funds are not guaranteed or insured by the FDIC or any other government agency â€” even if you buy through a bank and the fund carries the bank's name. You can lose money investing in mutual funds.

Past performance is not a reliable indicator of future performance. So don't be dazzled by last year's high returns. But past performance can help you assess a fund's volatility over time.

All mutual funds have costs that lower your investment returns. Shop around, and use a mutual fund cost calculator at sec.gov/investor/tools.shtml to compare many of the costs of owning different funds before you buy.

How Mutual Funds Work
A mutual fund is a company that pools money from many investors and invests the money in stocks, bonds, short-term money-market instruments, other securities or assets, or some combination of these investments. The combined holdings the mutual fund owns are known as its portfolio. Each share represents an investor's proportionate ownership of the fund's holdings and the income those holdings generate.
Other Types of Investment Companies

Legally known as an "open-end company," a mutual fund is one of three basic types of investment companies. While this brochure discusses only mutual funds, you should be aware that other pooled investment vehicles exist and may offer features that you desire. The two other basic types of investment companies are:

Closed-end funds â€” which, unlike mutual funds, sell a fixed number of shares at one time (in an initial public offering) that later trade on a secondary market; and

Unit Investment Trusts (UITs) â€” which make a one-time public offering of only a specific, fixed number of redeemable securities called "units" and which will terminate and dissolve on a date specified at the creation of the UIT.

"Exchange-traded funds" (ETFs) are a type of investment company that aims to achieve the same return as a particular market index. They can be either open-end companies or UITs. But ETFs are not considered to be, and are not permitted to call themselves, mutual funds.
Some of the traditional, distinguishing characteristics of mutual funds include the following: Investors purchase mutual fund shares from the fund itself (or through a broker for the fund) instead of from other investors on a secondary market, such as the New York Stock Exchange or Nasdaq Stock Market.
The price that investors pay for mutual fund shares is the fund's per share net asset value (NAV) plus any shareholder fees that the fund imposes at the time of purchase (such as sales loads).
Mutual fund shares are "redeemable," meaning investors can sell their shares back to the fund (or to a broker acting for the fund).
Mutual funds generally create and sell new shares to accommodate new investors. In other words, they sell their shares on a continuous basis, although some funds stop selling when, for example, they become too large.
The investment portfolios of mutual funds typically are managed by separate entities known as "investment advisers" that are registered with the SEC.
Advantages and Disadvantages

Every investment has advantages and disadvantages. But it's important to remember that features that matter to one investor may not be important to you. Whether any particular feature is an advantage for you will depend on your unique circumstances. For some investors, mutual funds provide an attractive investment choice because they generally offer the following features:
Professional Management â€” Professional money managers research, select, and monitor the performance of the securities the fund purchases.

Diversification â€” Diversification is an investing strategy that can be neatly summed up as "Don't put all your eggs in one basket." Spreading your investments across a wide range of companies and industry sectors can help lower your risk if a company or sector fails. Some investors find it easier to achieve diversification through ownership of mutual funds rather than through ownership of individual stocks or bonds.

Affordability â€” Some mutual funds accommodate investors who don't have a lot of money to invest by setting relatively low dollar amounts for initial purchases, subsequent monthly pu

Entry load - At the time of investment if made thru broker/agent/distributer. No entry load for direct investment. Max. entry load 2.25%. Debt funds may have less or nil.

Exit load - About 1% or less or nil. Depends on amount, type of fund and period of investment.

Annual expenses - Max. 2.5%

Operating expenses -- how much the fund spends to run itself & trade.

Management expenses -- how much the fund pays the management company for advice and management.

Sales & Marketing expenses -- how much the fund pays to market itself to potential clients.

-----------------
A short cut to (over) analyzing the expenses of particular funds is a two part sorting mechanism:

(1) Eliminate all loaded funds. These are funds that change a fee at the purchase or sale of a fund that does NOT go directly to the fund to offset other expenses. These are sales & marketing fees that you are paying for the fund. There is never a reason to pay these fees. Plenty of excellent funds exist without charging loads.

(2) Compare the fees of the funds that you are considering to (a) the Vanguard index fund or the ETF of the same category and (b) the "Peer Group Average" fee for like funds. Some people (me, for example) will argue that there is never a reason to pay more in fees than the index fund. Others will argue that paying more is justified only if the Alpha of the fund is positive. The higher the fee, the higher Alpha must be to justify the fee.

(Alpha is a technical way of trying to figure out if the manager of a fund is doing a better job than the market average. Positive Alpha is extremely difficult to maintain over long periods of time)

can exit load be charged more than 1%

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