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I believe it is equally as important for people to pay attention to how much they are being charged for mutual funds, annuities etc. as it is to get an early start at saving.

True, but even on this board, there has been little discussion about hidden costs of mutual funds. All the talk has been centered around loads and annual expense ratios.

I think few people realize that transaction costs (like commissions and spreads) are *not* included in annual expense ratios. Some mutual fund companies engage in "soft dollar" arrangements with brokerages. In these arrangements, the mutual fund pays higher commissions (i.e. they come out of investors' pockets), and the mutual fund *manager* gets to reduce their expenses (such as research expenses and other operating expenses). Also, mutual funds that trade a lot have high transaction costs.

Lipper Inc. studied total mutual fund costs. Here are the highest cost funds that they found:

Fund Reported Expense Ratio Total Expense Ratio
Van Eck: Intl Gold; A 1.965% 5.817%
ING: Smcp Opptys; A 1.885 4.128
Van Wagoner: Emeg Growth 2.000 4.018

Pretty outrageous, huh?
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