Financial Markets Book Financial Markets For The Rest Of Us
An Easy Guide To Money, Bonds, Futures, Stocks, Options, And Mutual Funds
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by Robert Hashemian

Page 362

responding to inquiries or providing information on the fund. Sometimes the service fee is broken out as a separate item or it may simply be referred to as other expenses. As an example, a fund with a 1% expense ratio would deduct $100 for an account that is worth $10,000 for the current year. If the account is worth $15,000 next year, the account would be charged $150 for that year, and so on. It should be noted that expense ratios are normally not constant. They change from time to time as the fund goes through changes of its own. For example, as the fund's net assets grows, investors may notice a declining expense ratio as there are more shares to distribute the costs amongst.

Miscellaneous Fees - Other than loads and operating expenses which are charged to the investors, a fund may have other fees such as:
Reinvestment Fee - While buying shares in a fund may come with a front-end load, reinvesting the fund's distribution (earnings paid to investors, covered next) in the same fund may also be subject to a sales load, possibly equal in percentage terms to the front-end load. After all, reinvesting the proceeds from a fund is really the same as buying additional shares of the fund.
Transaction Fee - This fee may be charged on top of front-end and back-end loads to pay for the cost of buying and selling securities. The transaction fee may be 1% to 3%.
Exchange Fee - normally a fixed amount charged for an investor who is switching from one fund into another within the same fund family. A fund family usually is a group of funds managed by the same investment company.
Maintenance Fee - Just like you may pay a monthly fee to your bank for your checking account, some funds may also charge their investors
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Copyright and Disclaimer
Book Chapters
Table of Contents Copyright and Disclaimer Foreword Money
Bonds Futures Stocks Options
Mutual Funds Retirement Final Words Appendix A

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