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Report highlights huge differences between mutual fund indirect costs

Previously invisible costs for mutual funds have now come into full view, according to Finans. The Danish financial news service reports on the discrepancies between the charges providers levy.

Photo: /ritzau/Lærke Posselt

There are significant differences between the indirect costs, or dealing charges, involved in investing via mutual funds, according to Danish financial news service Finans.

Specifically, the indirect costs are the spread between a security's buy and sell price. When the difference between the two prices is larger, the market is less efficient, and it is more expensive to buy and sell securities. Finans writes that some mutual funds have costs that are close to zero, while clients in other mutual funds pay 0.3 percent or more on their assets in annual costs. The larger mutual funds have lower average costs — around 0.1 to 0.15 percent.

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