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I'm looking specifically at this 529 plan Fidelity Intermediate Bond Portfolio, which is invested exclusively in this Fidelity Intermediate Bond Fund - Class I.

The portfolio lists a 1.64% Gross Expense Ratio (Class B).

The Fund lists an 0.57% Gross Expense Ratio (Class I).

Am I correct in thinking that both layers of fees apply? So if the Fund goes up 2% in a given year, I'm actually in the hole a little bit?

If so (I haven't looked deeply at 529 plans), are most of other 529 plans built in this same way?

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No, these are two separate fees, and you pay only one, depending upon which particular class shares you own.

See related question --->

Mutual fund question; what is a 'Series'?

  • If I own Fidelity Intermediate Bond Portfolio Class B, its holdings are 99.8% Fidelity Intermediate Bond Fund - Class I. So I end up owning both. Which fee do I pay? – bstpierre Apr 29 '11 at 21:37
  • @bstpierre Quoting from the Glossary for "Net Expense" -"The net expense ratio reflects the amounts reimbursed or reduced by the underlying Fidelity funds (does not include reductions from expense offset arrangements)". Very legal sounding but seems like you would only pay the 1.64, but even that sounds high for a bond fund, I would definitely verify with Fidelity – Ralph Winters Apr 30 '11 at 21:11

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