Mutual fund fees and expenses

Mutual fund fees and expenses are charges that may be incurred by investors who hold mutual funds. Operating a mutual fund involves costs, including shareholder transaction costs, investmentadvisory fees, and marketing and distribution expenses. Funds pass along these costs to investors in several ways. Some funds impose "shareholder fees" directly on investors whenever they buy or sell shares. In addition, every fund has regular, recurring, fund-wide "operating expenses". Funds typically pay their operating expenses out of fund assets—which means that investors indirectly pay these costs. Although they may seem negligible, fees and expenses can substantially reduce an investor's earnings when the investment is held for a long period of time.