The price at which mutual fund shares are sold to the public is its public offering price (POP), it including the sales charge plus the NAV for funds with loads.  For no-load funds, it equals the fund NAV.

POP = NAV – Sales Load

Shareholder fees are those fees that fund investors pay directly to an investment company for buying and redeeming shares or with respect to their account.  Shareholder fees include:

  • Sales charge – A fee charged by an investment company and paid by investors typically to the broker when they buy shares, it reducing the net amount remaining to be invested in the fund – a breakpoint is one or more investment levels in an investment fund at which the invested amount reduces the sales charge;
Front-End Load Schedule (Example)
$0.00 - $49,999.00 5.75%
$50,000.00 - $99,999.00 4.50%
$100,000.00 - $249,999.00 3.50%
$250,000.00 - $499,999.00 2.50%
$500,000.00 - $3,999,999.00 0.00%
$4,000,000.00 - $999,999,998.99 0.00%
  • Deferred sales charge (DSC) – A fee an investment company charges investors and typically paid to the broker when they sell or redeem fund shares, most commonly as a contingent deferred sales charge (CDSC), which is a back-end sale load that depends on how long the investor holds the fund shares and commonly decreases to zero after a specified time period;
  • Purchase fee – A charged paid by investors directly into the investment fund when investors sell their shares, often also imposed by no-load funds to offset some of the costs associated with the purchase of their fund shares;
  • Redemption fee – A fee paid by investors directly into the fund when they redeem their fund shares within a certain time period from the purchase date to offset costs associated with the redemption of fund shares (capped by the SEC at 2%);
  • Exchange fee – A fee charged by an investment company when investors exchange (transfer) their investment to another fund within the same fund group or family of funds; and
  • Account fee – A fee an investment company charges investors for the maintenance of their accounts, normally when the value on account falls below a certain amount.

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