What Fees do Load and No-Load Mutual Funds not have to Report in the Prospectus?
“…One ongoing expense that is not included in the expense ratio is brokerage costs incurred by a fund as it buys and sells securities. These costs are listed separately in a fund’s annual report, sometimes as a percentage and sometimes as a dollar amount. Some trading costs, however, are not included in this figure. The spread between the bid and ask prices of over-the-counter stocks, for example, can be thought of as a trading expense, but such costs are not reported by fund companies. The annual report also includes any interest costs, which a fund will incur if it borrows money to buy securities.” “All of the expenses that we have mentioned so for can be thought of as coming out of the portfolio’s raw return, skimmed off the top, so to speak…” (MorningStar: Investing 101: Mutual Fund Expenses) “…In addition, because mutual funds buy and sell securities, they incur brokerage costs. Because these costs vary and are difficult to predict, they are not included in the fee table in
