Covestor Radio: Mutual fund fees and taxes can bite


It’s time for yet another installment of Covestor Radio, a show about money milestones and investing for your future.

In our latest show, Kimberly Clouse, Private Client Advocate and Chair of Covestor’s Advisory Board, discusses mutual fund fees and taxes.

Mutual funds are an extremely popular financial product, but many investors may not have a clear handle on how much they’re paying in fees. There are many types of costs in mutual funds, including operating expenses, sales charges, redemption fees and exchange fees.

Clouse also discusses how fees are a relatively dependable predictor of fund performance.

Unlike the direction of the market, “fees are something you can control,” she explains.

Investors tend to focus on mutual-fund performance, but those returns are calculated after fees, so investors may not realize how much they’re paying in costs.

“Fees can have a big impact,” Clouse said, especially over longer periods with compounding. The average fees for a U.S. equity fund are around 1.4%.

“Focus on what you keep after fees and taxes,” she said.

Clouse’s full appearance on Covestor Radio is embedded below: