How much is your Mutual Fund costing you?

Mutual fund costs reduce your overall investment returns. With this in mind, have you stopped to ask what your mutual fund is costing you - and whether another fund with lower costs could earn you more money in the long-run?

There are three general categories of mutual fund fees: management fees (which can include marketing, sales, administration, legal, accounting, reporting and portfolio management costs); sales charges (which can include front-end and back-end loads, depending upon the type of funds purchased); and special fees (which could include initial account set-up fees, short-term trading fees, transfer fees for switching between funds, and more). A mutual fund may have one, two or all of these fees.

The management fee alone can range from 1% to 3% per year. Some funds may charge management fees that are higher or lower than this range. While this might seem like a small price to pay for expert portfolio management, a small difference in fees can make a significant difference in your account balance over a long-term period.

For example, let's say you invest $10,000 in a fund with a return of 10% before expenses. If the fund had annual operating expenses of 1.5%, after 20 years you would end up with roughly $49,725. On the other hand, if the fund had expenses of 0.5%, after 20 years you would end up with $60,858 - an 18% difference. Please note however, that this example does not reflect the return or fees of any particular investment, and your results will likely vary from this example. (Hypothetical Fee Illustration - Assumes a 10% Annual Return Actual Results Will Vary.)

That's why it's important for you to know what you're paying - and to decide which cost structure is best for you.

So how much is your mutual fund costing you? The SEC offers a cost calculator that lets investors easily estimate and compare the costs of owning mutual funds. You can run these numbers yourself, but you'll need some basic information. Specifically, you'll have to enter how long you expect to hold your investment, the dollar amount of your investment, and the expected annual rate of return. You'll also be asked to look in the find's prospectus or profile for information about fees. The mutual fund cost analysis is based on the SEC cost calculator, at http://www.sec.gov/investor/tools/mfcc/mfcc-int.htm.

Please also note that mutual funds are investments involving risk and are offered by prospectus only. Investment return and principal value will fluctuate so that upon redemption an investor's shares may be worth more or less than original value. An investor should carefully consider the investment objectives, risks, charges and expenses before investing. The fund prospectus contains this and other information about the investment company. For a copy of the prospectus, please contact your financial advisor. Please read the prospectus carefully prior to investing.

With all of this in mind, we'd be glad to run the numbers for you and send you the results.

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I look forward to meeting you!