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when the Growth fund of America shows a 13% average anual total return, is that after the 5.75% front load?

Dave
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when the Growth fund of America shows a 13% average anual total return, is that after the 5.75% front load?

It most likely does not include any loads (front or back), but, expense ratios would be included. It would be difficult for anyone to factor in the loads since its impact would depend on when the fund were bought and sold.

Bob
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so...does that mean I would have netted 8% after the fees if I DCA?

Dave
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so...does that mean I would have netted 8% after the fees if I DCA?

No. The 5.75% front load is applied only to new money you add. The money you added in previous years is invested with only annual fees deducted and the average annual return is net of those fees. So, if a given year's return was the 13% average then the money you added at the start of that year would return about (13.00% - 5.75%) = 7.25% and the money that was in there from prior years would return the entire 13% in the given year.

Also, given that annual return is different with each year the effect of the load and the varying return is different with each year. If a particularly poor investment year happens early in your investing the effect of the load will be quite different than if a particularly good year happens early in your investing.

It'd be a good exercise for you to build a spreadsheet and try different values for each year's returns to see the effects.

KennyO
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In any case, using no load funds would generally be preferred.
Bob
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