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Expenses Charged On Income Mutual Funds Vary Dramatically
Expenses charged to investors vary by fund and fund family. A high variance may be justified for some types of income funds - for example, to pay for expertise in determining which "high yield" (junk) bonds are worthy of investment.
But other income funds cannot justify their high expenses, which directly reduce the return to investors. Consider the variance (lowest cost versus highest cost) among general U.S. Government income mutual funds:
|
MUTUAL FUND
|
EXPENSE RATIO
|
1-YEAR RETURN
|
ASSETS ($M)
|
|
Vanguard LT Bond Index
|
.20
|
12.42
|
368.8
|
|
Aon Govt. Securities Y
|
.22
|
9.75
|
172.9
|
|
Schwab Total Bond Market Index
|
.35
|
8.71
|
663.3
|
|
Fidelity Spartan Govt. Income
|
.50
|
10.54
|
656.6
|
|
MainStay Govt. B
|
1.88
|
9.13
|
392.8
|
|
Morgan Stanley Dean Witter Federal Securities B
|
1.55
|
7.95
|
464.1
|
|
SunAmerica Govt. Securities A
|
1.51
|
9.18
|
158.1
|
|
Nvest Govt. Securities A
|
1.36
|
9.86
|
69.2
|
Returns as of 12/7/00. Assets as of 10/31/00.
Source: Investment News, December 18, 2000
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Free Opinion
Sponsored by James J. Eccleston, an attorney representing stockbrokers, financial planners and
investors nationwide in arbitration, litigation and regulatory matters, and a shareholder with the law firm
Shaheen, Novoselsky, Staat, Filipowski & Eccleston
P.C.(www.snsfe-law.com). This Web site contains material
of general interest. It is neither intended to, nor constitutes, either legal advice or investment advice.
Always consult an attorney and/or investment advisor when building and protecting your wealth.
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