Example:Consider a Growth Fund that charges the following fees according to its prospectus:
| Management Fee: | .64 |
| Distribution (12b-1) Fees: | .25 |
| Other Expenses: | .33 |
| Total Annual Fund Operating Expenses: | 1.22 |
Assuming 1) a $10,000 investment, 2) a 5 percent annual return, 3) no change in the above expenses as a percentage of average net assets, 4) reinvestment of all dividends and distributions, and 5) redemption at the end of each following time period, an investor would pay out the following fees over 1, 3, 5 and 10 years.
| 1 Year | 3 Years | 5 Years | 10 Years |
| $124 | $387 | $670 | $1,477 |
As the example shows above, prospectuses are required to disclose the funds' fees and their "cost of ownership" over 1,3,5 and 10 years. Since each fund must calculate its "cost of ownership" using the same assumptions, this is a valuable example that illustrates factors you can use to compare the cost of investing in a particular fund with the cost of investing in other mutual funds. Back to Top | Next
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