Released on = October 1, 2006, 10:47 am

Press Release Author = Suffolk First

Industry = Accounting

Press Release Summary = It is best to stick with no-load or low-load funds, but they
are becoming more difficult to distinguish from heavily loaded funds. The use of
high front-end loads has declined, and funds are now turning to other kinds of
charges.

Press Release Body = It is best to stick with no-load or low-load funds, but they
are becoming more difficult to distinguish from heavily loaded funds. The use of
high front-end loads has declined, and funds are now turning to other kinds of
charges. Some mutual funds sold by brokerage firms, for example, have lowered their
front-end loads to 5%, and others have introduced back-end loads (deferred sales
charges), which are sales commissions paid when exiting the fund. In both instances,
the load is often accompanied by annual charges.

On the other hand, some no-load funds have found that to compete, they must market
themselves much more aggressively. To do so, they have introduced charges of their
own.

The result has been the introduction of low loads, redemption fees, and annual
charges. Low loads--up to 3%--are sometimes added instead of the annual charges. In
addition, some funds have instituted a charge for investing or withdrawing money.

Redemption fees work like back-end loads: You pay a percentage of the value of your
fund when you get out. Loads are on the amount you have invested, while redemption
fees are calculated against the value of your fund assets. Some funds have sliding
scale redemption fees, so that the longer you remain invested, the lower the charge
when you leave. Some funds use redemption fees to discourage short-term trading, a
policy that is designed to protect longer-term investors. These funds usually have
redemption fees that disappear after six months.

Probably the most confusing charge is the annual charge, the 12b-1 plan. The
adoption of a 12b-1 plan by a fund permits the adviser to use fund assets to pay for
distribution costs, including advertising, distribution of fund literature such as
prospectuses and annual reports, and sales commissions paid to brokers. Some funds
use 12b-1 plans as masked load charges: They levy very high rates on the fund and
use the money to pay brokers to sell the fund. Since the charge is annual and based
on the value of the investment, this can result in a total cost to a long-term
investor that exceeds a high up-front sales load. A fee table is required in all
prospectuses to clarify the impact of a 12b-1 plan and other charges.

The fee table makes the comparison of total expenses among funds easier. Selecting a
fund based solely on expenses, including loads and charges, will not give you
optimal results, but avoiding funds with high expenses and unnecessary charges is
important for long-term performance.



Web Site = http://www.buy-mutual-funds.com

Contact Details = Michael Saville