Mutual Fund Costs

Just like any other service, there are costs associated with mutual funds.

Commissions and selling costs

Mutual funds are available through independent financial advisors, stockbrokers, life insurance agents, banks and trust companies. The people selling you a mutual fund are paid a salary and/or a sales commission.

In some instances, you pay for these by negotiating an upfront sales commission. Or the fund company pays the commission and you may pay a deferred sales charge when you sell your fund units. These are known as "load funds". In other instances, you do not pay a sales commission or deferred sales charge. These funds are known as "no-load funds," however, don't assume these funds come without a cost.

York Financial Group can minimize your commission and selling costs. Our independence, low overhead and advertising costs combined with our partnership with FundEX Investments Inc. enables us to identify the right funds for your goals and while minimizing your costs.

Management and administration costs

The fund manager charges a fee for the day-to-day management of the investment portfolio.

This management fee is charged directly to the fund. The fund pays brokerage fees and commissions on portfolio transactions, as well as taxes directly attributable to the fund. The fund may also pay daily operating expenses, i.e., legal, auditing and administrative expenses. The management fee and operating expenses together, calculated as a percentage of the fund's average net assets, are the fund's management expense ratio, or MER.

Although you don't pay the management fee and operating expenses directly, the size of the MER will affect your fund's performance because the greater the management costs, the lower the return on your investment. Like commissions, MERs should be measured against a fund's performance.