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Funds 105: How to Purchase a Mutual Fund

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1.
No-transaction fee networks charge _______.
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Fund companies for being part of the network. There are no up-front costs with a no-transaction fee network. The networks charge funds for being included, and funds very often pass along these charges to all shareholders (whether or not they invest via a supermarket) in their expense ratios.
2.
Investing with one of the more diverse fund families or a fund supermarket _______.
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Limits your paperwork. Investing all in one place makes recordkeeping easier and makes moving to and from funds a snap, too. And as long as you stick with one of the largest fund families, you'll have plenty of diversification options, too.
3.
With no-transaction fee networks, a mutual fund investor pays for the service _______.
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Indirectly. Since these networks charge mutual funds to participate in them, the funds pass their cost along to investors through the expense ratio.
4.
A justification that some do-it-yourself mutual fund investors use for buying no-load funds is that _______.
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Since they are not getting investment advice in return, why pay a commission? For this reason, many prefer no-load funds.
5.
Which of the following is not a way financial advisors are compensated?
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A part of the fund manager's fee. Advisors can charge you a fee or get a commission from products, such as mutual funds, that they sell. They can also charge a combination of fees and commissions. They cannot, however, take a portion of the fund manager's fee.