On Sat, 21 Apr 2007 11:12:08 -0500, "joeNOSPAM[at]bea.com"
<joe.weinstein[at]gmail.com> wrote:

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No, there is technically no such thing as an expense free fund but
some no load index funds can have ER's so low that for practical
purposes these funds are "expense free" compared to the alternatives.
This is particularly true in well administered 401K plans where the
employer has done the right thing and demanded low cost performance
from the 401K provider. It is equally possible to find high load
actively managed funds with high ER's and 401K's etc. with obscene fee
structures. It is very important for each investor to inform himself
what he is paying to participate in his investments and to make
investment decisions that are in his interest not in the interest of a
salesman, financial company, etc. -- at least to the extent of
avoiding blatant rip-offs.

"Brandon Hansen - www.BrandonHansen.com" <bmhansen[at]gmail.com> writes:

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That's not the way loads work. Loads are *in addition* to
the ongoing expenses. Whether or not you pay a load, you
pay "later" as you would say. Loads are entirely separate
and in addition to expenses. Some loads are partially
obscured by tacking them on as additional ongoing expenses,
but that's, again, in *addition* to the funds operating
ongoing expense ratio.

Loads are a sales fee. They go, generally, to the
brokerage and broker who sold you the fund. If that
broker helped you choose the funds and figure out how
they fit into your financial plan, you've paid for
that help. If you got no help but paid a load anyway,
you wasted that money.

There's nothing inherently wrong with loads - if you
know what they are and you get what you pay for. But
if you're not getting that help, there is no reason
whatsoever to pay the load.

Whether you buy a load fund or a no-load fund, the
manager of the fund gets paid and loads do *not*
subsidize that. They are seperate.

- quote -

That is NOT correct.

- quote -

And neither is that.

--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

This is for anyone unclear on loaded funds.

There is no such thing as a no-expense fund. A *load*, however, is
an excrescent
cut from the investor *and* the fund! Loads don't defray any fund
management costs
or help in any way the investment performance of the fund. They go
*out* of the fund
to whoever is on record as having been the middleman in the investment
purchase
by the investor. Actual fund expenses have nothing to do with loads.
Loads are simply
legal 'kick-back' enticements made by the fund managers with the
investor's money
so that brokers will sell their funds.
There are more stock mutual funds than there are individual stocks
that make
up the body of investments of these funds. There will always be a no-
load fund
with the same investment mix/philosophy and year-to-year performance
as any loaded
fund you might consider. In fact I would guess that the better funds
that compete well
enough on the merits of their performance would rather not have loads,
but would rather
keep and invest all the money. It would be the lesser funds that need
to do something
more to capture market share that would be forced to sacrifice some of
their funds
under management via front or yearly loads, or least painfully to the
fund, via back-end
loads.
Joe

On Apr 20, 2:14 pm, Justin <nos...[at]insightbb.com> wrote:

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Truly so and controlling fees/expenses are paramount to successfully
growing a portfolio. I am by no means advocating loaded funds, just
trying to lay out how the system works.

kastnna wrote on [Fri, 20 Apr 2007 13:00:39 -0500]:
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I'm not so sure, he said "No-Load" funds had expenses while implying
front end loaded funds didn't.

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However, many (most?) Loaded funds have higher expenses than many no-load
funds.

On Apr 20, 11:21 am, Justin <nos...[at]insightbb.com> wrote:
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Justin, I think he meant that since B and C shares may charge a back-
end load that is % based, you could end up paying more if the fund has
greatly appreciated. IOW, he would rather pay 1% up front on $100 ($1)
than pay 1% on the back when that fund has appreciated to $10000
($100).

However, that the thinking is potentially flawed. Front-end loads are
often higher than back-end loads so you may pay 5% up front or 1% on
the end. Furthermore, paying up front means that there is less to
invest and grow.

As Justin said, you are never truly done with expenses. ALL funds have
fees deducted annually. "A shares" generally have lower expense ratios
than the other share classes, followed by B then C. Some companies
also make a bunch of other share classes. What's best for each person
will depend on holding period, investment amount (breakpoints),
expected return, asset allocation strategies, etc, etc.

Brandon Hansen - www.BrandonHansen.com wrote on [Fri, 20 Apr 2007 10:03:48 -0500]:
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No, if you pay it up front you ALSO pay it every year as an expense
ratio.

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I suggest you research this, you are completely wrong.

The important thing to remember is that if you are in a fund, you will
pay for it. There is a difference between a "No Load" and a "No Cost"
fund. Every fund costs you money. You either pay it now or later. So
it depends on what your preference is.

My personal preference is to pay it up front and be done with it.The
fees are based on a % of the amount in the fund and when you put the
money in, that is when you typicaly have the least amount of money in
the fund (ideally). If you don't pay the fee going in then you will
either pay a percentage of it on an annual basis or when you come out
of the fund.

They get you coming or going.

Brandon Hansen

- quote -

buy Class A shares with a front-end sales charge, a portion of the
dollars you pay is not invested. Class A shares may impose an asset-
based sales charge, but it generally is lower than the asset-based
sales charge imposed by the other classes. A mutual fund may offer you
discounts, called breakpoints, on the front-end sales charge if you:

make a large purchase;
already hold other mutual funds offered by the same fund family; or
commit to regularly purchasing the mutual fund's shares.

Class B shares typically do not charge a front-end sales charge, but
they do impose asset-based sales charges that may be higher than those
that you would incur if you purchased Class A shares. Class B shares
also normally impose a contingent deferred sales charge (CDSC), which
you pay when you sell your shares. For this reason, these should not
be referred to as "no-load" shares. The CDSC normally declines and
eventually is eliminated the longer you hold your shares. Once the
CDSC is eliminated, Class B shares often then "convert" into Class A
shares. When they convert, they will begin to charge the same asset-
based sales charge as the Class A shares.

Class B shares do not impose a sales charge at the time of purchase.
So unlike Class A purchases, all of your dollars would be immediately
invested. But your expenses, as measured by the expense ratio, may be
higher. You also may pay a sales charge when you sell your Class B
shares.

If you intend to purchase a large amount of Class B shares, you may
want to discuss with your financial adviser whether Class A shares
would be preferable. The expense ratio charged on Class A shares is
generally lower than for the Class B shares, and the mutual fund may
offer large-purchase breakpoint discounts from the front-end sales
charge for Class A shares.

Class C shares usually do not impose a front-end sales charge on the
purchase, so the full dollar amount that you pay is immediately
invested. Often Class C shares impose a small charge if you sell your
shares within a short time of purchase, usually one year. Class C
shares typically impose higher asset-based sales charges than Class A
shares, and since their shares generally do not convert into Class A
shares, their asset-based sales charge will not be reduced over time.
Class C shares are often used for asset-allocation purposes.

Class C shares do not impose a sales charge at the time of purchase,
but they may impose a CDSC or other redemption fees. Additionally, in
most cases your expense ratio would be higher than Class A shares, and
even than Class B shares if you hold for a long time!"
---
ALL MUTUAL FUNDS HAVE FEES AND EXPENSES. How do you think they pay the
light bill? Its not as simple as "load" and "no-load." Just because
you can't readily see them, doesn't mean they are not there.

On Apr 17, 7:48 am, "Anne" <a...[at]not.dot> wrote:
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Hi. Class A typically refers to a *LOADED FUND* that will take X% of
the money
you send them and kick it right back to whoever sold you the fund.
This is one
of the ways advisers get paid. However, if you do just a little
research, you can
always find a NO-LOAD fund that will meet the same purpose and
performance,
and that will save you lots of money.
Whether a fund is loaded or not, has zero bearing on how well it
will do
with your money (whatever's left after the fees). Some funds are back-
end
loaded so all your money goes in, but X% is cut away from you when you
take it out...
If you can buy a fund that is typically loaded, without paying the
load,
then it is on equal footing for comparison with other similarly
oriented
no-load funds. Then you can compare by performance and expenses.
Some loaded-funds have shares with no front or back load, but instead
take an extra bit out every year beyond what it actually takes to run
the
fund, which goes to the seller. It is best to avoid these loads if you
can
do your own fund choosing.

What is the difference for a fund (t rowe price, fidelity, dreyfus, vanguard) which
lists Class A (plus some other alphabetic designations) ?

does the Class A somehow designate a better composition for the fund?

is it of significant benefit to be able to purchase a Class A without sales fees,
other than the cost of the fees themselves (which is obviously a benefit) because this
Class A does better somehow than the same fund Class T or similar ?