- Fund name
- The name that best describes the fund you are analyzing. This entry is for informational purposes only, it will not affect the calculated results.
- Fund type
- This is the category that best describes the fund you are analyzing. This entry is for informational purposes only, and will not affect the calculated results.
- Holding period
- The number of years you are going to hold this fund.
- Investment amount
- This is your initial investment in this fund. The actual amount invested in the fund will be your initial investment minus any front-end sales charge. Other fees and commissions are not taken from this amount. The tool assumes that other fees and commissions are paid separately, or as out-of-pocket expenses.
- Rate of return
- The annual rate of return you expect from this fund. The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending December 31st 2023, had an annual compounded rate of return of 15.2%, including reinvestment of dividends. From January 1, 1970 to December 31st 2023, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.9% (source: www.spglobal.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a financial institution may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.
It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that investment funds and/or investment companies may charge.
- Sales charge (front-end load)
- This is a fee charged when you purchase your shares of the fund. A sales charge at the time you invest is also called a front-end load. It will reduce the actual amount that you invest in the fund. For example, if you had an initial investment of $10,000 in a fund with a 3% sales charge, or front-end load, you would actually be investing $9,700 in the fund and paying $300 as a sales charge. It is important to note that many mutual funds have no sales charge. Funds without sales charges are often called no-load.
- Deferred sales charge (back-end load)
- This is a fee charged when you sell your shares of the fund. A deferred sales charge is also called a back-end load. It will reduce the actual amount that you receive when you sell your shares in the fund. For example, if you had a final investment balance of $20,000 in a fund with a 5% deferred sales charge, or back-end load, you would actually receive $19,000 and pay $1,000 as a deferred sales charge. It is important to note that many mutual funds have no deferred sales charge. Funds without sales charges are often called no-load.
Some funds will have a deferred sales charge that decreases or is eliminated. This is called a Contingent Deferred Sales Charge (CDSC) and the actual deferred sales charge depends on the number of years you hold the fund. Make sure to enter the correct deferred sales charge for the number of years you will be holding this fund. Deferred sales charges can be calculated with either the original investment amount or the ending balance. This calculator assumes that this fee is calculated as a percentage of the investment amount.
- Other fees and commissions
- This includes any other fee or commission that you are required to pay to purchase shares in the fund. Fees and commissions will not reduce the value of your initial investment. You will, however, need to have additional funds available to pay any fee or commission that you may be charged.
- Fund converts
- Check this box if your fund converts to a new class of shares during your holding period. This should be explained in your prospectus. If your shares do convert, you will pay the fees and expenses associated with the new class of shares after they convert. If you check this box, the tool allows you to enter your total operating expenses before the conversion and after the conversion and the number of years before your shares will convert.
- Conversion year
- This is the year your shares in the fund will convert to a new class. This option is not available if your fund shares do not convert.
- Total operating expenses
- This is the total operating expenses for the shares in your fund. Your total operating expenses should be available from your fund's prospectus. If your fund shares convert to a new class, you will be asked to enter the total operating expenses for both before and after the conversion.
The tool assumes that all operating expenses are taken out of your balance at the end of the year, after your return for the year has been added to your account.
- Opportunity cost
- This is the total earnings that you would have made if your sales charges, operating expenses, fees and commissions had been invested. For example, if you had a fee of $1000, and a rate of return of 10% you would have an opportunity cost of $100.00 after one year.
Please note that deferred sales charges do not have an opportunity cost since they are paid when your fund is sold. All other fees have the opportunity cost calculated when the costs are incurred.
