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Mutual Fund Return Rate

Purchasing mutual funds is not the same as purchasing stock funds. Many mutual funds have share classes, and usually identify them with a letter after the fund name. (Acme B, Or Acme C, share) The letters indicate a difference in how the same mutual funs will pay out. This is important because it will affect the investor when he decides to sell the fund, or any portion of the fund. This is contrast to regular stock funds which do not separate class funds.

The mutual fund return rate is what the fund achieves with the amount of money it has been given to use ( capital) Mutual funds are managed funds. Unlike regular stock funds ,mutual funds are managed . The manager(s) decide how to invest the money and what and when to invest. The purchaser of the mutual fund pays a fee for this service so therefore this will affect the return rate if the mutual fund. In most cases purchasing mutual funds instead of stock funds is a safer way to invest. The rate of return may be less because of the management fees attached, but the capital is usually safer because the fund is managed.

Many mutual funds have fees attached either up front or at the time of the sale of the fund. The rate of return will be affected because of these fees. For instance, a mutual funds rate of return is 8 percent, but the manager charges a 3 percent managing fee, the rate of return is only 5 percent ( 8 percent minus 3 percent) Investors in mutual funds need to be aware of the fees attached to the fund. Although the rate if retune maybe appear substantial, you have to figure and subtract the manager fees to get your net profit.

Some mutual funds charge a fee up front, at the time of the purchase. This fee is called a front end load fee It usually is in the form of a percent of purchase . if you purchase $100 of shares in a mutual fund, and the front end fee is 3 percent, you are actually only investing $97, Some funds have constant fee every time you sell a portion of your stock. Some have ongoing monthly fees. Regardless of the type of fee you pay, this will affect the amount of you will receive on the rate of return of the mutual fund.

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