"I think there is a load up front, in addition to an annual mgmt fee and such. This up front load of 1% would be a few thousand off the top. Is that unreasonable? Do I have to worry about the compounding effect of these fees year over year, or is it as simple as saying "fund makes 10%, I pay 1%, so net is 9%?)"Sorry I didn't answer that question in my first post. The load fee is skimmed off of every deposit made into the fund (called a front-load). It is paid only once for every deposit. I won't be caught dead paying a load fee. Some funds charge back loads or redemption charges. Redemption charges are not always unreasonable as long as they expire after a time. For example if you need to hold the shares for 60-90 days, even a year might be OK though I don't like it. The idea behind these redemption charges that expire are to prevent/reduce rapid buying and selling of the funds shares. Every time you put oney in the company needs to buy stock for the fund and every time you sell the fund they need to sell the stock... this generates expenses. If people trying to time every little market move buy and quickly sell often they can create a large burden on the rest of the funds investors lowering their returns. These expiring charges encourage this type of pwople to go elsewhere to play their games. On the other hand some back-load fees do not expire (some funds even charge both front load and back load fees). This is just another way for the fund manager/company to get you money. The expense ratio is an ongoing and continous expense used to pay the funds operating expenses, the managers, and give profits to the fund company's stock holders. Think of it as a little hole in the bottom of a bucket causing a little stream of money to dribble out. This will always exsist regardless of the profitability of the fund. If the fund makes 10% in a year and charges a 1% expense ratio then you make 9%. If the fund losses 15% in a year and charges a 1% expense ratio then you lose 16%. Just to be clear, when the fund quotes you annual returns read the fine print. The returns on the "hypothetical $10,000" dollars DO include the expense ratio. They do not include any costs that would be associated with liquidating the fund such as back-load fees or taxes.