How important is the latest NAV to your Investment?

Known to reduce the amount that an investor gets the fees that investors have to pay play a very important role in the amount of returns that are received. This may include different charges such as transaction fees, sales charges, account fees, etc.

Investing in mutual funds is known to be the most common form of investment that is made in the stock market.

Some of the different types of fees and expenses that are involved in the same include:

1) Sales charges

There may be a sales charge which is imposed when either purchasing or selling different securities/units of a share of a particular fund. There are different types of sales charges which may include front-end load or initial sales charge (ISC), back-end load or deferred sales charge (DSC), low load or low sales charge (LSC) or even no load.

2) Transaction fees such as switch fees or short-term trading fees.

3) Account fees such as registered plan fees or minimum account balance fees.

4) Fund expenses such as the fees or expenses that a fund contributes to be deducted from the fund’s assets before the returns are calculated or even published.

This may also include management fees, operating expenses (or even fixed administration fees), trailing commissions such as those paid from management fees, trading costs or even incentive fees.

    

Management fees as well as operating expenses (MER): All of the operating expenses or management fees are known to contribute to a fund’s management expense ratio, which is also known as MER. This can range from 1% to 3%.  These fees are known to include overseeing the fund, the hiring a portfolio manager to make the investment decisions and hiring of other company/companies to assist in the administration of the fund.

The operating expenses include expenses such as legal fees, audit fees, bookkeeping and administrative fees, audit fees and marketing costs.

These funds all have a net asset value (NAV) which refers to the market value of the fund’s holding without adding the liabilities of the fund (net liabilities). This value is computed at the end of the day. There are certain funds which are known to compute their NAV’s more than once time per day.  Their turnover rate is known to be an indication of the ‘volume’ of the particular funds securities trading. It is easy to find out the latest NAV online from the website of a particular financial company. There are plenty of trading portals which are also available online where people can perform their different trading activities.

There are many different advantages of investing in different types of mutual funds. Some of the different advantages include increased diversification, daily liquidity, professional investment management, ability to participate in investments which are available only to larger investors, convenience and service and ease of comparison.

When investing in these types of funds there is a tremendous amount of flexibility as well as funds to choose from. Some of these may include equity funds, balanced mutual funds and bond funds.