Mutual Funds and Fees: What You Should Know

All mutual funds charge fees. Because small percentage differences can add up to a big dollar difference in the returns on your mutual funds, it’s important to be aware of all the fees associated with any fund you invest in.

You will find detailed descriptions of the fees a fund charges in the fund’s prospectus . Mutual funds must provide a copy of the fund’s prospectus to shareholders after they purchase shares, but investors can-and should-request and read the fund’s prospectus before making an investment decision.

Some fees are charged at specific times, based on your situation or actions you take, and some are charged on an ongoing basis. Here are types of fees that funds might charge on an ongoing basis:

• Management fees. These fees pay the fund’s portfolio manager.

• 12b-1 fees. These fees, capped at 1 percent of your assets in the fund annually, are taken out of the fund’s assets to pay for the cost of marketing and selling the fund, for some shareholder services, and sometimes to pay employee bonuses.

• Other expenses . This miscellaneous category includes the costs of providing services to shareholders outside of the expenses covered by 12b-1 fees or portfolio management fees. You also pay transaction fees for the trades the fund makes, though this amount is not reported separately as the other fees are.

The following fees are based on your situation or actions you may take, and so they may or may not be amounts you…

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