What are mutual fund fees?
Once you've found the mutual fund you want, take a close look at the fees and costs. And remember, the relative importance of fees and costs depends on how you plan to use the fund in pursuit of your investment goals.
Operating expense ratio (OER)
This is a trading fee some brokerages may charge whenever you buy or sell mutual fund shares.
Where to look it up?
View our transaction fees >
What do mutual funds cost at Schwab?
As an industry leader in mutual fund investing, we offer some of the best pricing you'll find anywhere. Here's a quick breakdown:
- What you might pay elsewhere
- With Schwab
Operating Expense Ratio (OER)>What you might pay elsewherePassively managed funds>
The industry asset-weighted OER for passively managed funds is 0.08%.1Actively managed fundsThe industry asset-weighted OER for actively managed funds is 0.69%.1With SchwabPassively managed funds>
The asset-weighted OER ratio for passively managed mutual funds is 0.04%.3 OERs can range from 0.03% – 0.39%.Actively managed fundsSchwab Funds*2The asset-weighted OER ratio for actively managed mutual funds is 0.69%.3 OERs can range from 0.3% – 1.33%.
Load>What you might pay elsewhereLoads vary fund-to-fund. Look for the fund's load in its prospectus.>With Schwab$0 for Schwab Funds* and any fund participating in Schwab's Mutual Fund OneSource® service.4>No-load and load-waived funds that do not participate in Schwab Mutual Fund OneSource are also available, but transaction fees apply.
Transaction Fee>What you might pay elsewherePurchase $0 – $74.955>Redeem $0 – $49.995With SchwabPurchase>$06 online for Schwab Funds* and any fund participating in Schwab's Mutual Fund OneSource service.Up to $74.95 for all other funds.†Redeem$06 online for Schwab Funds* and any fund participating in Schwab's Mutual Fund OneSource service.†Per-trade transaction fees do not exceed 8.5% of principal, up to $74.95. Trades below $100 in principal are exempt from the transaction fee.
*Schwab Funds are managed by Charles Schwab Investment Management and are included in the Schwab Mutual Fund OneSource service, which offers thousands of no-load, no-transaction-fee mutual funds.
- View important information about mutual funds
1. Industry OERs obtained from Simfund, as reflected on 1/15/19. Includes OERs from all funds registered in the U.S., excluding money market funds and fund of funds. OERs are net expense ratios, and may not take into account the impact of fee cuts or fee increases that occurred since the prospectus was last filed.
2. Charles Schwab Investment Management, Inc. (CSIM), the investment advisor for Schwab Funds, and Charles Schwab & Co., Inc. (Schwab, Member SIPC), the distributor for Schwab Funds, are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation.
3. Asset-weighted average expense ratio is based on assets as of 6/30/18. An asset-weighted average basis is used to give more weight to funds with greater assets. It reflects where investors are actually putting their assets, and thus, better reflects the actual expenses by investors than does a simple average (weighting each fund equally).
4. Trades in no-load mutual funds available through the Mutual Fund OneSource service (including Schwab Funds), as well as certain other funds, are available without transaction fees. For each of these trade orders placed through a broker, a $25 service charge applies. Schwab reserves the right to change the funds we make available without transaction fees and to reinstate fees on any funds. Schwab's short-term redemption fee of $49.95 will be charged on redemption of funds purchased through Schwab's Mutual Fund OneSource service (and certain other funds with no transaction fees) and held for 90 days or less. Schwab reserves the right to exempt certain funds from this fee, including Schwab Funds®, which may charge a separate redemption fee, and funds that accommodate short-term trading.
Charles Schwab & Co., Inc., Member SIPC, receives remuneration from fund companies participating in the Mutual Fund OneSource service for recordkeeping and shareholder services and other administrative services. Schwab also may receive remuneration from transaction fee fund companies for certain administrative services.
5. Based on competitor pricing information obtained from their respective websites as of 1/9/19: Fidelity, E*Trade, TD Ameritrade, and Vanguard. Competitor pricing and offers subject to change without notice.
6. Please be aware that transaction fees may apply to certain no-load funds that do not participate in Schwab's Mutual Fund OneSource platform. Such funds are subject to Schwab's standard transaction fees, in addition to any redemption fees imposed by the fund. See the Charles Schwab Pricing Guide for details. Get more details about Schwab Mutual Funds.
View important information about mutual funds
What is net asset value?
The net asset value, or NAV, is the share price of the mutual fund, which is the fund's assets minus its liabilities, divided by the number of outstanding shares.
- NAV fluctuates daily as the value of the individual fund holdings and the number of outstanding fund shares change.
- Unlike stocks and exchange-traded funds (ETFs), mutual funds trade only once a day, after markets close at 4 p.m. ET. If you enter a trade to buy or sell mutual fund shares, your trade will be executed at the next available NAV, which is calculated after the market closes and typically posted by 6 p.m. ET.
What are mutual fund share classes?
Unlike ETFs, many mutual funds offer more than one class of shares. This structure allows you to select a share class that's best suited to your time horizon.
Sometimes known as "retail" shares, these are typically no-load funds and impose a moderate expense ratio.
Class A shares
These shares typically charge a front-end sales load, which means that the full price an investor pays upfront isn't entirely invested in fund shares; some portion of the investor's money goes instead to a financial professional.
Class B shares
These shares generally forego a front-end sales charge but impose either a back-end sales charge or a contingent deferred sales charge, which is paid as redemption decreases over time.
Class C shares
These shares also impose no front-end sales charge but charge higher ongoing asset-based fees.
What are the tax consequences?
When holding a mutual fund outside of a retirement account, investors are subject to taxes on annual gains, even if you don't sell—or, in some cases, just bought your shares. So it's important to understand a mutual fund's tax efficiency. Here are a few things to look for:
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