Fee Structures and Other Costs

What this video covers

• How public offering price (POP) equals net asset value (NAV) plus sales charge for front-end load funds, and where contingent deferred sales charges (CDSC) apply on Class B and C shares
• The 12b-1 fee caps: 0.75% maximum distribution fee, 0.25% maximum service fee, and 1.00% combined total, plus the board approval requirement including a majority of independent directors
• What the expense ratio includes (management fees, 12b-1 fees, administrative costs) and explicitly excludes (sales loads, brokerage commissions on portfolio trades)
• How breakpoints create volume discounts on Class A shares, and why executing a purchase just below a breakpoint threshold constitutes a regulatory violation
• How rights of accumulation (ROA) use current NAV across fund family holdings to reach breakpoints, and how letters of intent (LOI) work: 13-month forward period, backdated up to 90 days, non-binding with retroactive charge from escrowed shares if unfulfilled
• The hedge fund "2 and 20" structure: 2% management fee on assets under management (AUM) plus 20% performance fee, and how the high-water mark limits incentive fees to profits above previous peak NAV