A sales charge is a commission that is charged by a broker or other salesperson when selling certain securities, such as mutual funds. The sales charge may be a flat fee or a percentage of the purchase price. What are four types of fees that may appear on your mutual fund statement? Sales charges: A sales charge, also called a load, is a fee charged by the fund when you buy or sell shares. This fee goes to the broker or other financial professional who sold you the fund.
12b-1 fees: A 12b-1 fee is an ongoing marketing and distribution expense charged by the fund. This fee is used to cover the costs of advertising and marketing the fund, as well as the commissions paid to brokers and financial professionals who sell the fund.
Expense ratios: An expense ratio is the annual fee that all funds charge to cover the costs of running the fund, such as management fees, administrative expenses, and operational costs.
Redemption fees: A redemption fee is a fee charged by the fund when you sell your shares. This fee is used to cover the costs of selling the securities in the fund. How is mutual fund sales charge calculated? Mutual fund sales charges are calculated as a percentage of the investment amount. For example, if you invest $1,000 in a mutual fund with a 5% sales charge, you would pay $50 in sales charges. What is another term for CDSC for annuity? Another term for CDSC for annuity is distribution fee.
Which fee is charged by all mutual funds?
The vast majority of mutual funds charge what is known as an "expense ratio." This is a fee that is charged by the fund in order to cover its operating expenses. It is typically a percentage of the assets that are managed by the fund, and it is charged on an ongoing basis.
What is the purpose of sales charges in a deferred annuity contract?
Sales charges are fees that are charged by the insurance company in order to sell the annuity contract. These fees are typically a percentage of the premium that is paid by the policyholder, and they are used to cover the costs of marketing and selling the annuity.
There are two types of sales charges that may be assessed on a deferred annuity contract: front-end charges and back-end charges. Front-end charges are fees that are charged when the policy is first purchased, and they are typically a higher percentage of the premium than back-end charges. Back-end charges are fees that are charged when the policy is surrendered or withdrawn, and they are typically a lower percentage of the premium than front-end charges.
The purpose of sales charges is to generate revenue for the insurance company so that it can cover the costs of marketing and selling the annuity. Sales charges are typically assessed on both immediate annuity contracts and deferred annuity contracts.