What are the costs caused by mutual funds?
Mutual funds cause two different kinds of costs payable by investors. First one is the brokerage that is deducted from investors due to purchase-sale transactions as described above. However, this kind of brokerage is not mandatory; in other words, funds are free to implement it. If they want to implement, their by-Law and representation must describe the manner of calculation of such brokerages. Another cost to be incurred by investors is the expenditures covered by the assets of the fund during the operation of the fund. As assets are used to cover these expenditures, they decrease the unit price of shares and the profit created by the fund. Further, investors tend to understand the reason of this impact less than that of the other impact. The expenditures are in proportion to the size of the fund; in other words, the bigger portfolio the fund has got, the higher expenditures it makes. Therefore, in order to determine the size of the expenditures properly, the rate of expenses, which
Related Questions
- If my traveling companion cancels their trip and I still want to go on the trip, will entiretravelinsurance cover additional costs caused due to their cancellation?
- If my traveling companion cancels their trip and I still want to go on the trip, will Travelex cover additional costs caused due to their cancellation?
- What state and federal regulation changes have caused water costs to increase?
