What is the sales charge on a mutual fund called quizlet?

Those paid upon redemption are called back-end load or deferred sales charge. in addition to management fees or load charges, mutual fund investors must pay annual fee based on a fixed % of assets (from 0.25% to 1%); paid out to sales reps/investors for servicing existing clients.

What is a mutual fund fee called?

Annual fund operating expenses These fees, also known as mutual fund expense ratios or advisory fees, typically are between 0.25% and 1.5% of your investment in the fund per year.

What is mutual funds quizlet?

Mutual Fund. A mutual fund is a fund that pools money from multiple investors and invests it into a variety of stocks, bonds, and other securities. Shareholder. A shareholder is an individual who holds shares of stock in a company.

How does a mutual fund work quizlet?

The mutual fund raises money by selling its own shares to investors to pool money to purchase a portfolio of stocks, bonds, short-term money-market instruments, other securities or assets, or some combination of these investments based on specific investment goals.

What is a fee charged by a mutual fund company when selling a mutual fund?

The maximum “front-end load” or sales charge that may be attached to the purchase of mutual fund shares. This fee compensates a financial professional for his or her services. By law, this charge may not exceed 8.5 percent of the invest- ment, although most fund families charge less than the maximum.

How are mutual fund fees paid?

Mutual fund fees generally fall into two categories. Both categories, “shareholder fees” and “annual fund operating expenses,” are disclosed in the fee table in the front of a fund’s prospectus. Some funds charge a commission to be paid to brokers when you buy or sell your shares.

Do you have to pay fees on mutual funds?

There are two major fees for mutual funds: Shareholder fees – Commissions and other one-time costs when you buy or sell, and sometimes exchange, shares of a mutual fund. Operating fees – Ongoing fees that a fund charges to pay for day-to-day fund management.

What is a mutual fund quizlet Chapter 11?

mutual fund. fund that pools the savings of many individuals and invests this money in a variety of stocks, bonds, and other financial assets. diversification.

What is the benefit of a mutual fund quizlet?

Mutual funds offer many benefits. Some of those benefits include: the ability to invest with small amounts of money, diversification, professional management, low transaction costs, tax benefits, and the ability to reduce administrative functions.

How are mutual funds fees paid?

These fees and charges are identified in the fee table, located near the front of a fund’s prospectus, under the heading “Shareholder Fees.” Funds typically pay their regular and recurring, fund-wide operating expenses out of fund assets, rather than by imposing separate fees and charges directly on investors.

What do mutual funds pay?

Mutual funds distribute income to shareholders through capital gains distributions or dividend distributions. Interest earned by a fund’s assets is paid as a dividend distribution. To avoid paying taxes on earnings, mutual funds are required to pass on all net income to shareholders at least once each year.

What do you mean by fees in mutual funds?

The amount that investors pay for all of a mutual fund’s management fees and operating costs. family of funds A group of mutual funds managed by one investment company. income dividends The earnings a fund pays to shareholders from its dividend and interest income.

How do mutual funds work?

automatic systems to add to or withdraw from your account, checking accounts, bookkeeping services. All mutual funds carry the same level of diversification and exposure to risk.

What is a mutual fund company?

An investment company that pools the money of many investors—its shareholders— to invest in a variety of securities. net asset value (NAV) The current market value of the securities contained in the mutual fund’s portfolio minus the mutual fund’s liabilities divided by the number of shares outstanding.

What is a mutual fund’s Expense ratio?

A mutual​ fund’s expense ratio compares the​ fund’s expenses to its total assets. Each individual mutual fund hires an investment​ advisor, generally from the management​ company, who oversee the particular fund. How is this advisor​ paid?