Why aren’t mutual funds obligated to more clearly report the fees they deduct from shareholders?

Complete Question:

Why aren’t mutual funds obligated to more clearly report the fees they deduct from shareholders? We have transparency in most areas, but my mutual fund statements never explicitly show the amount of fees taken in quarterly/annual fees by the Funds — it is mixed in with “change in market value” on my statements. I bet that most people probably have no idea they are paying fees at all on their Funds. Why are there no requirements for this to be more transparent?


I applaud this question; the person is on target.

So, you want to know what you are really paying for with Open End Mutual Funds?

It’s like Adam and Eve biting into the Apple in the Garden of Eden. I will give you the knowledge, but you may not like what you see? – Joe Cantu

Mutual Fund Fees

Unfortunately, Open End Mutual funds have more liberal reporting requirements. Many Open End Funds (called Mutual Funds) do not report their fees until many weeks after the quarter. As a result, brokerage firms who issue these statements have a difficult time reporting what is accurate and many times can only report what it sent to them by the mutual funds.

The best way to determine the money you are losing in Mutual Fund fees is to look at the website: Morningstar. Type in your five digit symbol and look for the “expense ratio” This is the percentage you are paying of the value of the mutual funds. Also the US government has a public site to help you can determine what you are paying for your mutual fund at: Fund Analyzer – FINRA
Called FINRA Fund Analyzer.

Securities which trade on the exchanges are much more regulated, such as Exchange Traded Funds, ETFs and have lower fees, as a security type.


If you have $100,000 in a fund and the expense ratio is 1.15%, then you a paying $1,150 per year in addition to the commission (normally 2% to 5.25%) or “Wrap Fee” service (normally 1% to 2%) which could add up to approximately $3,150 to $6,150 in annual fees.

Beware of high fees in Open-End Mutual Funds.

ETF’s are better.


ETFs have risk of loss which the investor must be willing to bear. This is answered for educational reasons and not intended for any recommendations.

Joe Cantu is a regular commentator for Quora on the following topics: Stock Market, Economics, Defined Benefit Pension Plans, Asset Management, Mutual Funds, Investing, and Exchange Traded Funds.

About the Author

Joe CantuChief Investment Officer for "Cantu Tactical Wealth Management", in GTAA, a Global Tactical Asset Allocation Manager using stocks, bonds and ETFs in momentum strategic portfolios. Joe worked as a discretionary portfolio manager at three of the largest Wall Street firms, Merrill Lynch, Smith Barney and Morgan Stanley. He is a West Point Graduate, B.S. degree economics concentration, with a Master's in Business, M.S. received in Heidelberg, Germany a division of Boston University, USA. Disclosure: Cantu uses Fidelity Investments to Custody clients assets and online Performance viewing.View all posts by Joe Cantu

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