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Save on Mutual Fund Fees

Pay lower fees to mutual funds by using breakpoints.

By
Andrew Horowitz
June 19, 2008
Episode #075

Page 3 of 3

Make the Most of Breakpoints

Some tips...don’t spread your money around into several different mutual fund families if there are good funds that meet your objectives with the fund family you are already investing. It probably won’t be worth it in the long run because of the additional expense you will pay upfront. Also, resist splitting your assets into different types of share classes. If you must pay a load, pick either Class A, B, or C and look at the prospectus to find out which will be more cost effective. Usually, the more you invest, the better the savings by using front-end loads with breakpoints.

Research the Fee Structure

When choosing a mutual fund family, you can request to see their breakpoint schedule in advance to make sure they do offer breakpoints and that they are at competitive rates. If you ever feel like you have been ripped off, didn’t receive the breakpoints you should have, or were were pushed into specific load option that was not in your best interest, you can look to file a complaint with the brokerage company or representative. By law, they are required to keep a copy of all complaints on file. If they don’t clear up your concerns you can direct the situation to the SEC, also known as the Securities and Exchange Commission, or the NASD. The best way to avoid these situations is to get the broker’s recommendation in writing and read the prospectus carefully. In the end, an educated investor is the best investor.


Cha-Ching …and that’s all for now. Courtesy of Andrew Horowitz, guest host of Money Girl’s Tips for a Richer Life. Thanks for tuning in to “Money Girl”. As a reminder, if you are interested in learning more about mutual funds, go to iTunes or Audible.com right now and download my book and start on the road to becoming a Disciplined Investor. Listen to my weekly podcast…The Disciplined Investor is also available for free on iTunes.

Or, you can check out my Quick and Dirty Tips podcast!  Find me as The Winning Investor, where I'll give you Quick and Dirty Tips for beating the market.

As always, everyone’s situation is different, so be sure to consult a tax or financial advisor before making important financial decisions. This podcast is for educational purposes only and is not intended to be a substitute for seeking personalized, professional advice.

Thanks for listening!

Additional Reading:

Mutual Fund Share Classes Explained

ICI - Mutual Fund Breakpoints Explained

SEC - Breakpoints

Money image courtesy of Shutterstock

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