The price at which investment fund shares are sold to the public is its public offering price (POP). For mutual funds, it includes the front-end sales charge plus the net asset value (NAV). Investors in investment funds commonly pay a brokerage commission whenever buying and selling their shares through brokers.
Shareholder fees are those charges investors pay for buying and redeeming shares or with respect to their account:
- Sales charge – A "front-end load" paid by investors in mutual funds to brokers when buying shares, it reducing the net amount remaining to be invested in the fund.
- Purchase fee – The fee charged and paid by investors directly into the fund when buying mutual fund shares.
- Deferred sales charge (DSC) – A "back-end load" typically paid investors to brokers when selling or redeeming fund shares. Most commonly in the form of a contingent deferred sales charge (CDSC), the amount depends on how long the investor holds the shares and commonly decreases to zero after a specified time period.
- Redemption fee – The fee paid by investors directly into the fund when redeeming their fund shares, usually within a certain time period from the purchase date – capped by the US SEC at 2%.
- Exchange fee – A fee charged when investors exchange their fund investment with another fund within the same fund group or family of funds.
- Account fee – An amount charged investors for the maintenance of accounts with mutual funds, commonly when the account value falls below a certain amount.
| 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% |
Other fees and costs that can be incurred when buying ETFs and closed-end funds include:
- Brokerage commission – Paid by investors to brokers with each purchase or sale of shares.
- Bid-ask spread – The difference between the bid price a broker-dealer is prepared to pay for and the lowest ask price at which the BD will sell the shares.
- Premium (discount) to net asset value – When the shares are trading at a price higher (lower) than their NAV in reaction to the market supply and demand.
