As illustrated below, transaction costs can add substantially to the overall expense of an investor’s mutual fund. In addition to being substantial, these costs are nearly impossible to accurately quantify.

Tax Costs

Many investors pay more than their fair share in taxes when owning mutual funds. This problem is most transparent when mutual funds are owned outside of an IRA, Roth IRA, 401(k), or other tax-deferred accounts. An investor who buys into a…