Keeping Expenses in check
Every mutual fund has a price tag and, apples-to-apples, the lower the expense, the higher the net return. Even small differences in fees from one fund to another can add up to substantial differences in your investment returns over time says the SEC.
American 401k is designed with low fund expenses as our primary focus.
Here are some of the finer details on fund expenses and how we operate within American 401k:
» Sales loads: None. There are NO commissions when you buy or sell mutual fund shares. All funds are no-load.
» 12b-1 fees: None. There are NO marketing and distribution fees.
» Exchange fees: None. There are NO charges to participants in exchanging or transferring shares from current holdings to other funds within the menu.
» Minimum balance fees: None. There are NO fees charged when your balance falls below a specified minimum investment amount.
There’s an expense ratio deducted from the fund’s returns before you receive your net return each year. These expenses are detailed by prospectus and we make them transparent through up-front expense data and easy-to-read reporting.
institutional shares
American 401k qualifies participants for institutional funds regardless of the minimum initial investment. Institutional share class mutual funds are low-expense investments offered in certain 401ks. They are superior to other share classes because the lower expense ratios translate into higher returns.
One mutual fund will often offer several different share classes available to investors, where institutional share classes are commonly available only to sizable investors and employer-sponsored retirement plans such as a 401k.
Gaining access to these lower-expense share classes is a significant plus when comparing 401k providers.
American 401k has a level program fee, experienced by participants, and detailed by the services agreement. There are no employer-related investment expenses.
in Summary
When you consider the impact that expenses have on long-term returns, it’s easy to understand why the fund decisions are some of the most important within a 401k. We help you with research materials, giving you an in-depth view of the funds and the tools you need to make a careful evaluation of the investment lineup.
