Mutual funds explained
Synopsis
Investors can lose about 3% of their investment each year due to hidden mutual fund fees, which can total hundreds of thousands over a lifetime.
Synopsis
John Bogle, founder of Vanguard, discusses mutual fund fees in a 2013 news segment. He warns that investors can lose about 3% of their investment each year due to hidden charges like load fees and management fees. Bogle advises examining the expense ratio, which summarizes these costs. He recommends no-load funds, which often perform similarly but do not carry extra fees, potentially increasing retirement savings.
Deep Dive
Why Watch
- Find out how fees can drastically reduce your investment returns.
- See why John Bogle recommends low-cost mutual funds.
- Learn to read mutual fund reports for hidden fees.
Did You Know
- Investors can lose about 3% of their investment each year due to fees.
- High fees can cost you hundreds of thousands of dollars over a lifetime.
- The expense ratio includes all fees and can exceed $1,000 annually.
- No-load funds perform the same as load funds, according to experts.
Perfect For
Frequently Asked Questions
What percentage of my investment can I lose annually due to mutual fund fees?
You can lose about 3% of your investment a year just in fee payments.
What are the two main costs associated with mutual funds?
The two main costs to understand are the load and the expense ratio.
What is the expense ratio in mutual funds?
The expense ratio includes all the fees and compares them to the total amount of the fund.
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