Learn all about Mutual Funds, what they are, what the different terms and definitions mean and about buying mutual funds at Place Trade with an advisor or online. Get a free copy of the Guide to Understanding Mutual Funds and compare funds and fees with FINRA’s free Mutual Fund Expense Analyzer.

Place Trade offers access to thousands of mutual funds as well as Exchange Traded Funds (ETFs) to help clients diversify their portfolios.

Can I buy Mutual Funds in my IRA?   Yes, you may purchase mutual funds in your IRA or other retirement account including a Traditional IRA, Roth IRA, Rollover IRA, SEP, SIMPLE, 401(k) or individual 401(k). Mutual Funds may also help to diversify your 529 or other college planning accounts.

Why buy Mutual Funds? There are many reasons why investors choose mutual funds. From ease of trading, diversification and competitive returns, mutual funds are an attractive investment for many of our clients.

What are Mutual Funds?   Mutual funds are a compilation of stocks, bonds and individual securities determined by a fund manager; with many investors pooling their money together in a joint investment. The individual investments of each fund are dependent upon the overall objective of the fund. When these investments rise or fall in value, you gain or lose with them.   Mutual funds may be open-end; in which new shares are continuously issued as more investors choose to buy them or closed-end issuing a fixed number of shares.

Place Trade Financial offers a wide variety of mutual funds — but we do not carry any proprietary mutual funds because we do not want to have any conflicts of interest with our clients!  To learn more please call us today at 1-800-50-PLACE or 1-919-719-7200 to see if we offer a specific fund that you are interested in.  (Most likely we do!)

We offer experienced full service financial professionals for individuals that would like help with their investment planning needs and professional screening tools for online traders.

Mutual Fund Fees and Expenses

When choosing a mutual fund, a fund’s prospectus lists all fees charged according to the organization of a particular fund. Be sure to read any fund’s prospectus carefully to determine the amount of invested money actually going towards the purchase of shares.

What types of Sales Charges & Fees do Mutual Funds Charge?  

Sales Charges are fees paid by an investor when purchasing or redeeming shares of an invested fund. As dictated by law, these fees may not exceed 8.5% of the amount invested.

No-load Funds — Funds with no sales charge.

Front-end Load Funds — Funds that charge a fee with the purchase of shares. This fee is subtracted from the invested amount before shares are purchased with the remainder being used to purchase actual shares.

Back-end Load Funds — Funds having a sales charge assessed upon the sale of shares and subtracted from the proceeds.

Level Load Funds — Typically, these funds have an initial sales charge of 1% of the investment; the fund 12b-1 fees are usually 1% for the life of the investment.

Redemption Fees — Additional fees deducted from the proceeds of the sale when the investor sells shares back to the fund (not all funds charge these fees). These fees are often dependent upon the length of time the shares have been held by the investor.

Contingent Deferred Sales Charge — A sales charge that decreases over time dependent upon the length of time that the shares are held. Over time, this fee will eventually disappear.

No Transaction Fee Funds: Place Trade does not offer no-transaction fee funds at this time.  Place Trade does not take special payments to sell specific funds in place of charging our clients a fee.  We believe that this is in the best interest of our clients.  We believe that there is no such thing as a free lunch.

12b-1 Fees are assessed to cover additional expenses not directly related to the sale of shares. These expenses include advertising, printing, toll-free phone lines, compensation for brokers who sell shares and distribution of sales literature. These charges are limited by the FINRA to 0.75% per year, but the actual amount, from nothing to the maximum, is set by the fund itself.

In accordance with SEC regulation, there are limits as to the maximum sales load a fund may charge. With no-load funds, 12b-1 fees cover sales expenses. If a fund charges 12b-1 fees and other service fees, a maximum sales load of 6.25% is permitted. If a fund has 12b-1 fees but no other service charges, the maximum sales load is 7.25%. Sales loads of up to 8.50% are allowed for funds that charge neither service nor 12b-1 fees.  (Please note that Place Trade does not offer any funds with such high sales loads.  We can get them if you want them but believe we may be able to find quality funds with better overall returns/yields to fit your needs.)

It is very important to read and understand all of the fees that your mutual fund may be subject to. It is also important to know whether you are buying a Preferred or Special Fund  from a firm when it may only be preferred or special because the firm is receiving a kick back or a little extra special payment of some kind to sell one fund family over another — regardless of what is right for you.

The same goes for ‘free mutual funds as well as free (commission free or no load) Exchange Traded Funds (ETFs).  It may be free but you are still paying for it by paying fees inside of the fund that can take away from your total return.  A firm may receive special payments from fund managers or companies as well as charge higher expenses or take a piece of the spread in cases of other securities. All of these charges make your free trade more expensive than you may realize.

Place Trade does NOT receive any special payments or have any relationship where the firm receives additional payments for offering one firm over another.  Nor does the firm offer any free transactions when actually receiving additional payments or a piece of the spread on any security (Place Trade believes in doing what is right for our clients and does not just pad the bottom line at your expense).

Additional Fees that may be incurred while investing in Mutual Funds at any firm:

Accounting Fees Custodian Fees Management Fees Exchange Fees Sales load on reinvested dividends (this is not common) Account Fees charged by the firm that holds your fund

Important information regarding investing in mutual funds at Place Trade:

Place Trade offers a wide range of mutual funds including both no-load mutual funds as well as other traditional mutual funds.  Due to constraints set by our clearing firm we are only able to hold certain mutual funds within your online trading account while other mutual funds will be held fund direct (at the mutual fund company that manages the investments that you choose and not within your Place Trade Account).  

What this means is that if you own or purchase mutual funds:

If our clearing firm offers the funds of your choice they will be held in your online trading account at Place Trade

If our clearing firm is not able to hold   the mutual funds of your choice  we will hold them directly with the mutual fund company (that manages the funds that you have chosen) and not within your Place Trade account that clears through IB.  Place Trade will still be associated with your account and will be able to serve as your advisor and assist you with buy and sell transactions associated with these funds.

Clients wishing to have their investments held fund direct will be required to complete a separate account application provided by the investment company that manages your mutual funds (regardless of whether or not you have an online trading account at Place Trade).

Minimum size on initial fund purchases and subsequent orders vary by mutual fund company.

Mutual fund orders are transmitted to the fund company daily for 15:59pm for pricing.

Some mutual fund companies have restrictions on purchases,  exchanges  and redemptions.  Please read your prospectus and/or summary prospectus carefully prior to investing.

Special Notes regarding mutual funds held within your Place Trade online trading account:

Delivery of prospectuses will be made electronically and not by postal mail.  (You may be able to receive snail mail delivery for investments held fund direct.)

All dividends will be automatically reinvested unless you direct us differently.  (You are not required to automatically reinvest dividends when your investments held fund direct.)

As with any investment, there is risk. Investors should consider these risks, the investment objectives, charges and expenses outlined in the prospectus carefully before investing in any Mutual Fund. For a prospectus containing complete information, contact the fund you are considering or your broker at 1-800-50-PLACE. Read the prospectus carefully before you invest. Past performance is no guarantee of future results. Principal value and investment returns will fluctuate with changes in market conditions. An investor’s shares, when redeemed may be worth more or less than their original cost.

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