I have been reading about mutual funds fees and charges. I have noticed that these fees are expressed as rates (%). I would like to ask if I have understood over which quantities are these rates applied to get the net fee/charge value. Are the affirmations below correct?
The fund's ongoing charge: This is a fee the investor pays yearly. To get the net value of the fee, you need to apply the rate over the total value of your investments + any cash your have in your financial company's account. For instance, if this fee is 0.2%, you have $10000 invested in one fund and $5000 in cash, the fee net value will be 0.2% of 15000 = 30. The fee refers to the yearly costs, but it might be divided in several payments across the year.
Account fee: This is not related to any fund in particular, but to the investment firm itself. You need to pay this fee to have an account opened with them, as some banks do. This fee is calculated over the current net value of your investments + any cash, exactly the same as above. E.g. if the account fee is 0.15%, added to the above, the total fee would be 0.35%. If at the end of the year the investor has the above 15000 in investments+cash, the fee would be 0.35% of 15000 = 52.5
Trading costs: These are the costs incurred by the fund manager in buying/selling the fund's underlying assets, in order to achieve whatever goal/strategy the fund has. This is not a fixed rate that can be predicted, so you won't find it in the fund's prospectus (you might find an estimation).
Front-end loads: A fee you pay each time you buy fund's participations. This rate is calculated over the amount you are investing, not over the net value of your investment. In other words, following the above example, if the investor invests another $500 in the fund, the fee (say, 2%) will be applied to only this $500, so 2% of 500 = 10.
Back-end loads: A fee you pay when you sell fund's participations. As above, this fee is applied over the amount you are selling, not over your whole investment. E.g. having $15000 invested in a fund, if the investor sells assets worth of $1000, the fee would be applied only over those $1000.
This is, of course, without telling anything about taxes.
Is the above correct? Am I missing other fees?
I have investigated a bit more and I have found this:
It has a fee I didn't consider:
Conversion fee: It seems to be a commission that might apply when you buy a fund in a currency other than its underlying asset's one. In the above example, it is 1%. Over which quantity is this 1% applied?