These fees are a percentage charged directly to the sum of money undergoing a transaction.Depending on the investor’s transaction, they will incur the following types of fees:
Front Load: These are charged up front (at the time of purchase) and can be up to 2,5% or more of the amount invested. For example, if you invest Rp.1,000,000 with a 2,5% front load, the load amount will be Rp.25,000 and therefore your initial investment will actually be Rp.975,000
Back Load: These are charged only when you sell a fund. Also called deferred sales charges, back loads are usually in the 2,5% range and may decline or even be reduced to zero over time, usually after 1 year.
Switching Fee: These are charged when you process of transferring an investment from one mutual fund to another.
These are ongoing and recurring fees that contribute to the overall NAV movement of the mutual fund. They are a percentage informed on a per annum basis. The fees usually consist of:
Management Fee: Not to be confused with Management Expense Ratio (MER),management fee is only part of the MER. The MER is the total of the management fee, operating expenses (or administration fee) and related taxes charged to a fund each year, expressed as a percentage of a fund’s average net assets for that year. While Management Fee is an annual fee that encompasses all direct expenses incurred in managing the investments such as hiring the portfolio manager and investment team.
Custodian Bank Fee: These are charged annually by the Custodian Bank
(A mutual fund custodian can either be a bank or a trust. The funds assets, its underlying securities, are kept with the third party to reduce the risk of unscrupulous brokers taking advantage of the fund. The custodian may also keep records for the fund or track other information as needed)
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