About the Fund Analyzer
Analyze and compare the cost of owning mutual funds and ETFs. Enter how much you invest, the return you expect and how long you'll hold, then each fund's sales charges and expense ratio, and see the future value after fees and the total cost of ownership for every year up to 20.
Compare up to three funds side by side, such as a no-load index fund, Class A shares with a front-end load and Class C shares with a deferred sales charge, to see how fees and expenses change what you end up with.
How it works
A front-end load is taken from your first investment, so with a 5.75% load only $9,425 of $10,000 is invested. After that the fund grows every day at the rate that compounds to your yearly return, and each day's share of the expense ratio is taken from the balance. Over a year that costs about the expense ratio times your average balance.
Each year in the table assumes you sell at the end of that year. A deferred sales charge (CDSC) for that year is taken on the lesser of what you invested and what the fund is then worth: Class C shares sold within the first year typically pay 1%, $100 on $10,000. Class C shares that convert to Class A switch to the lower expense ratio after the years you enter.
Total cost adds the sales charges and the operating expenses, the pre-tax cost of owning the fund. At 5% for 10 years, $10,000 in an index fund with a 0.04% expense ratio costs $51.45 and grows to $16,223.92, while Class A shares with a 5.75% load and 0.59% expenses cost $1,269.38 and grow to $14,472.80.
Assumptions and limits
- The rate of return is the same every year; it is your choice, not a forecast or a fund's actual returns.
- Enter the load that applies to your amount: many Class A funds lower it at breakpoints such as $25,000 or $50,000.
- Account-level fees, such as an advisory or wrap fee or brokerage commissions, are not included, and the costs are before taxes.
Worked examples
Index fund vs. Class A shares
$10,000 at 5% for 10 years: $51.45 in costs with a 0.04% index fund, $1,269.38 with a 5.75% load and 0.59% expenses.
Class C shares sold early
With 1.35% expenses and a 1% CDSC, selling after one year costs $237.41: $137.41 in expenses and a $100 sales charge.
A small fee over a long time
$50,000 at 7% for 20 years: a 1% expense ratio costs $18,802.73 and ends at $158,413.99; 0.10% costs $2,095.05 and ends at $189,653.33.
How to use the Fund Analyzer
- Enter your investment. Initial contribution, rate of return and holding period.
- Describe each fund. Front-end load, expense ratio and any deferred sales charge.
- Compare the costs. Future value and total cost for every year you might sell.
Frequently asked questions
What does it cost to own a mutual fund?
Most costs fall into two groups. Sales charges are paid when you buy (a front-end load) or sell (a deferred sales charge), and annual operating expenses, shown as the expense ratio, are taken from the fund's assets every day you own it.
How much difference does the expense ratio make?
More than it looks over long periods. With $50,000 growing at 7% for 20 years, a 1% expense ratio costs $18,802.73 and leaves you about $31,000 less than a 0.10% expense ratio, because the money paid in fees no longer grows.
Class A, B or C shares: which costs less?
It depends on how long you hold. Class A shares charge a front-end load but have lower yearly expenses; Class C shares have no front load but higher expenses and a deferred charge if sold early. Enter both as scenarios to see where the lines cross.
What is a breakpoint?
A breakpoint is an amount at which a fund lowers its front-end load, for example from 5.75% to 4.50% for investments of $50,000 or more. Check the fund's prospectus for its schedule and enter the load that applies to your amount.
Why is total cost lower than the difference in value?
Total cost counts the sales charges and expenses you actually pay. The gap in ending value is larger because the money paid in fees would also have earned returns if it had stayed invested.
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