Our mutual fund investors pay two basic types of fees: expense ratios and sales commissions which are known in the industry as sales loads. Traditionally, mutual fund expense ratios are the cost of ongoing expenses such as fund administration and operating costs. These fees are paid annually as a percentage of your total assets in the fund. As noted above, passively managed funds have lower expense ratios compared to actively managed accounts as they require fewer financial professionals and other overhead costs. 
In 2018, our average equity mutual fund charged an expense ratio of 1.25% but the average equity-fund investor only paid 0.59%. That might not seem like a big difference, but over time it can add up to tens of thousands of dollars in lost retirement savings. Another common expense are sales loads. These are commissions paid at the time of share purchase (front-end loads) and when redeemed (back-end loads). Mutual funds come in four different structures that will impact fees you’ll pay.
Most mutual funds are Open-end funds where there is no limit to the number of investors or shares. The NAV per share rises and falls with the value of the fund. On the other hand, Close-end funds have a limited number of shares offered during an IPO and we manage far fewer closed-end funds compared to open-end funds.
Whether or not funds carry commissions, they are expressed by “loads”, such as Load funds. The majority of our managed funds charge a sales commission to the advisor in addition to the NAV share price. However, our No-load funds, also known as “no-transaction-fee funds,” charge no sales commissions for the purchase or sale of a fund share, the most common entry point for our investors.
You want to invest your money but also want to avoid some of the risks and hassles that come with picking individual stocks? Mutual funds provide the benefits of a diversified portfolio without the time required to manage one.
Our mutual fund packages are one of the most common tools we use to help clients build long-term retirement savings. If you are not satisfied with your current 401(k), pension or traditional individual retirement account or a Roth IRA, we can assist you with a free evaluation.
Diversification. This is one of the most important principles of investing. If a single company fails and all your money was invested in that one company, then you have lost your money. However, if a single company fails within your portfolio of many companies, then your loss is constrained. Mutual funds provide access to a diversified portfolio without the difficulties of having to purchase and monitor dozens of assets yourself.
Simplicity. Once you’re exposed to a mutual fund with a good track record, you have a relatively small role to play. Let us do all the heavy lifting.