Exchange Fees

DEFINITION of 'Exchange Fees'

A type of investment fee that some mutual funds charge to shareholders if they transfer to another fund within the same group. Other fees shareholders may encounter include sales loads, redemption fees, purchase fees, account fees, 12b-1 fees and management fees.

BREAKING DOWN 'Exchange Fees'

Investors should be aware of all fees, both direct and indirect, related to their investments. Fees have a significant impact on total returns and a fund that charges higher fees will not necessarily lead to higher profits for the investor. The SEC does not generally limit mutual fund fees, although FINRA imposes some limits. To make similar investments with lower fees, consider investing in exchange-traded funds.

RELATED TERMS
  1. Clearing Fee

    A fee charged by a clearing house for its services. A clearing ...
  2. 12B-1 Fee

    An annual marketing or distribution fee on a mutual fund. The ...
  3. Brokerage Fee

    A fee charged by an agent, or agent's company to facilitate transactions ...
  4. Cumulative Discount Privilege

    A way that an investor in a mutual fund can qualify for lowered ...
  5. Fee Income

    Revenue taken in by financial institutions from account-related ...
  6. Garbage Fees

    Unnecessary fees tacked onto mortgage closing costs by lenders ...
Related Articles
  1. ETFs & Mutual Funds

    12b-1: Understanding Mutual Fund Fees

    Many mutual funds charge investors a 12b-1 fee to pay for marketing and promotion expenses.
  2. ETFs & Mutual Funds

    How Mutual Fund Companies Make Money

    Read about the many different kinds of fees and sales charges mutual fund companies can use to generate revenue from those who invest in their shares.
  3. Retirement

    Are Fees Depleting Your Retirement Savings?  

    Each retirement account will have a fee associated with it. The key is to lower these fees as much as possible to maximize your return.
  4. ETFs & Mutual Funds

    A Guide To Investor Fees

    Fees are one of the most important determinants of investment performance and something that every investor should know.
  5. Retirement

    Are Fees Eating Up Your Nest Egg?

    You may not be able to avoid all fees associated with retirement planning, but you should know what you’re being charged for. Here's a list of common fees.
  6. Financial Advisor

    How To Optimize Your Portfolio and Reduce Fees

    Investment fees aren't avoidable altogether, but there are strategies investors can employ to keep those fees at bay and reduce the impact on returns.
  7. Managing Wealth

    What is a 12b-1 Fee?

    Mutual funds typically charge between .25% and 1% in 12b-1 fees for marketing, distribution and administration expenses.
  8. Financial Advisor

    Are Financial Advisor Fees Too High?

    Fees charged by financial advisors run the gamut. Are you getting a fair deal or paying too much?
  9. ETFs & Mutual Funds

    Selling Mutual Funds: What Happens When You Liquidate?

    Learn about the hidden costs that can be triggered when you redeem mutual fund shares. Even no-load funds have fees and expenses you may not know about.
  10. ETFs & Mutual Funds

    3 Investment Fees That Are Negotiable

    Investment fees are a necessary evil but that doesn't mean they have to be overly costly. There are ways to negotiate some of the expenses down.
RELATED FAQS
  1. What is considered a reasonable 12b-1 fee?

    Learn what is generally considered to be a reasonable 12b-1 fee, what these fees are charged for and how these fees are regulated. Read Answer >>
  2. Why is the 12b-1 fee controversial?

    Learn about the 12b-1 fee that is applied to many mutual funds, and why a large number of analysts and investors question ... Read Answer >>
  3. Where do I look for fees that I am charged on investments? What are those fees called?

    The fees and expenses charged for investments vary. The fees usually depend on the type of investment and the investment ... Read Answer >>
  4. In what situations would mutual fund fees be higher than ETF fees?

    Compare the fees associated with investing in mutual funds and exchange-traded funds and find out why ETF fees are usually ... Read Answer >>
  5. What kinds of fees are involved in futures trading?

    Learn what the various costs are that are charged by brokerage firms and trading exchanges to individual futures trading ... Read Answer >>
  6. Why do mutual fund companies charge management fees?

    Learn why mutual funds charge their investors management fees, which include the cost of hiring investment advisors and various ... Read Answer >>
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center