Mutual fund fees, explained
A mutual fund pools money from many investors into a professionally managed portfolio. Unlike ETFs, mutual funds trade once a day at their net asset value (NAV), and many charge fees that are easy to overlook:
- Front-end load (Class A shares): a sales charge, often up to 5.75%, taken from every dollar you invest before it is invested.
- Back-end load (Class B/C): a charge when you sell, usually shrinking the longer you hold.
- Expense ratio: the yearly management cost, including 12b-1 marketing fees. Actively managed funds often charge 0.5–1.0% or more.
This calculator takes the load out of each contribution, charges the expense ratio monthly, and compares the result with a no-fee fund that earns the same gross return. The gap is what fees cost you. Large investments often qualify for breakpoint discounts on loads, so ask your advisor.