Open-End Mutual Funds Explained | CFA® Level 1 Exam Prep

Understanding Open-End Mutual Funds

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Open-end mutual funds -

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A. sell their shares at their NAV. In contrast, closed-end investment companies typically charge a sales fee in addition to the NAV for shares at their initial public offerings. The sales fee tends to be about 10 to 11% of NAV.

B. sometimes sell their shares at their NAV plus a sales fee. Mutual funds that do charge sales fees are known as load open-end funds. The sales fee tends can range from 3.0 to 8.0% of NAV.

C. sell their shares at their net asset value (NAV). In contrast, closed-end investment companies typically charge a sales fee in addition to the NAV for shares at their initial public offerings. The sales fee tends to be about 4 to 4.5% of NAV.

D. almost always sell their shares at their NAV plus a sales fee. Mutual funds that do charge sales fees are known as load open-end funds. The sales fee tends to be 4 to 4.5% of NAV.

E. sell their shares at their NAV. In contrast, closed-end investment companies typically charge a sales fee in addition to the NAV for shares at their initial public offerings. The sales fee tends to be about 7.5 to 8.0% of NAV.

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Explanations

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A. B. C. D. E.

Some open-end funds charge sales fees for sales shares. The fees are typically 3.0 to 8.0% of NAV. These load funds generally do not charge redemption fees.

No-load funds sell shares at their NAV, but some of them have small redemption fees of about 0.5% of NAV.

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