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What are the costs of investing in mutual funds?

Mutual Fund Investing at NYLIFE Securities

Mutual funds are a popular investment choice that can help clients achieve their financial goals. NYLIFE Securities offers clients over 2,000 individual mutual funds across more than 40 fund families. These funds cover the universe of investment objectives and sectors.

Generally, mutual funds are not intended for short-term investing (excluding money market funds). Potential investors should have at least three to six months of liquid assets to meet day-to-day living expenses, other major anticipated obligations, and emergencies in addition to the amount invested. As with any type of investment, there are many factors to consider before making a decision to invest in mutual funds, including:

  • Your financial situation (i.e. your annual income, net worth, liquid net worth, and tax status);
  • Your liquidity needs;
  • Your time horizon (i.e., how long before you will need to access the funds you are investing);
  • Your investment experience;
  • Your other security holdings;
  • Your risk tolerance;
  • Your investment objectives;
  • Your need for diversification;
  • The expenses associated with each mutual fund share class (as explained more fully below); and
  • Whether you qualify for any sales charge discounts and/or waivers.

What are the costs of investing in mutual funds?

A fund's prospectus contains a fee table listing the charges associated with the fund. Sales charges and annual operating expenses vary depending on the share class selected. It is important to understand the costs associated with the sale and operation of a mutual fund, as those costs affect return on investment.

For example, a fund may impose a sale or redemption charge, often referred to as a load, on transactions in fund shares. Funds also incur ongoing administrative and operating expenses. Operating expenses are not paid directly as a fee, but are deducted from the fund’s assets, reducing investment returns. Other charges include payments made to service providers such as custodians, transfer agents and accountants. In addition, mutual funds incur trading costs in buying and selling portfolio securities.

Please contact your Financial Services Professional for a prospectus for the particular mutual fund you are considering. Investors are asked to consider the investment objectives, risks, and charges and expenses of the investment carefully before investing. The prospectus contains this and other information about the investment company. Please read the prospectus carefully before investing. An additional document, known as the statement of additional information, contains supplemental information concerning the fund’s investment practices and policies. It can be obtained by contacting the Mutual Fund family, please refer to the prospectus for the particular Mutual Fund’s contact information. (All investments involve risk, including the potential loss of principal.)