All mutual funds charge fees and expenses paid by investors. Mutual fund fees generally fall into two categories:

• Shareholder fees (such as loads and redemptions); and
• Annual fund operating expenses.

Loads and redemption fees are paid directly by investors purchasing or selling the funds. Fees can vary widely from fund to fund and are required to be published in the mutual fund's prospectus. It's important to understand the fees because the amount of fees that investors pay affects their return on their investment as mutual fund fees are assessed to investors regardless of the performance. The types of potential fees that a mutual fund could charge include the following:

• Transaction Charge (Load or Sales Charge)

  Some mutual funds charge commission when investors buy or sell shares. Loads are included in "shareholder fees" in mutual funds' prospectuses.

  • Front-End Load: Sales charges that an investor might pay when purchasing shares of a mutual fund. These charges are typically used to compensate the adviser for assistance in selecting the fund that meets the investor's investment objectives.
  • Back-End Load: Sales charges that an investor might pay when selling shares of a mutual fund. Contingent deferred sales charges usually decrease incrementally over time until they disappear.
  • No-Load: No-load mutual funds have no sales charges because investors are not using an adviser to select the fund that meets their investment objectives. While there are no sales charges, no-load funds are not without cost. They may have other fees, such as a distribution or service fee and they will have annual fund operating expenses.