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Mutual Funds Require Some Study

Radio Transcript, 60 seconds, for use during week of Nov. 26.

This is an Invest Wisely minute brought to you by Iowa State University Extension.

When you invest in a mutual fund you pay for someone else’s expertise and that means annual management fees. 

In addition there may be other fees such as up-front sales fees or fees when you sell your shares. 

However, there are no-load funds. That means you pay no sales fee. So shop for no-load funds and also evaluate the fund’s expense ratio. This is the percentage of the fund’s net assets that go to annual operating expenses. Use a mutual fund calculator. You can get this on the web at www.sec.gov by clicking on investor information. 

Compare all the costs of owning mutual funds before you buy.

Invest Wisely comes from Iowa State University Extension through a grant from the Investor Protection Trust providing investor   education on the web at investorprotection.org.

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Updated November 28, 2007