Mutual Funds/Operating Expenses

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Question
Hello:

I have a question regarding my expenses for my mutual fund. I pay the operating expenses as follows.  Can you explain in other words what this indicates?

"The operating expenses (expressed as 0.70% of the Retirement Fund) are factored into the fund's share price. You will not be asked to pay anything else on top of the share price that you paid when you purchased shares of the Retirement 2020 Fund."

I thank you for your reply and explanation.

Answer
HI Kenneth,

On a pro rated basis, the expense ratio (fund expenses) is taken out of the fund's NAV on a daily basis. As a shareholder, you don't see this happening, unlike a sales charge which is more obvious to the investor.  The statement is correct, assuming that this is a no load fund and that there is no redemption fee.

I hope this helps

Michael Weiss
Owner
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Michael Weiss, CFA

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I am the owner of Series 7 Exam Tutor , a financial tutoring business that provides personalized tutoring for the Series 7 Exam, the Series 6 Exam ,the Series 65 Exam, the Series 66 Exam, the Series 63 Exam and the Series 24 Exam . I also offer tutoring for finance courses. For additional information, please visit, Finance Exam Tutor. Prior to launching Series 7 Exam Tutor, I worked in investments for 20 years with the majority of this time focused on investment analysis and portfolio management. I have worked for large companies such as Merrill Lynch and Evergreen Investments and have also worked for smaller firms as well. Throughout my career, I have sought to mentor younger colleagues whenever possible, especially those enrolled in the CFA program. I completed the CFA program in 2002 after passing all three exams on the first try. I also passed the Series 7 Exam with a score of 94%. For additional information about me, you can visit the links below:
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