Are front- and/or back-end sales charges included in a mutual fund’s expense ratio? Or does the expense ratio only include fees for costs for managing/marketing the fund?
1 Like
Hi @Mass_coffee_louse - sales charges are not included in a fund’s expense ratio. The expense ratio reflects the cost of the fund’s operational expenses (basically the cost of keeping the fund running), while sales charges compensate financial professionals for selling the fund. Also, all shareholders pay the expense ratio together, while sales charges are shareholder-specific. Whether it’s a front or back-end sales charge, the amount assessed to a shareholder is dependent on a few factors (e.g., how much is invested if front-end or how long the position is held for back-end).
3 Likes
Thought that was the case but just wanted to be sure.
Thanks for clarifying!
1 Like