I purchased AIM mutual funds--the operating costs are over 2%. Is that considered high?

Answer 1

Not as high as some funds, and more than others. In general, AIM funds are not bad funds. Guess I am saying that the 2% is nothing to panic over. Shop around and take your time before deciding to move out of them. Good Hunting!

Answer 2

Short answer YES!

Depending on the fund you have, they do have some ok Returns, but... You can find equivalent funds in Janus or Vanguard that offer the same performance.

Go to www.Morningstar.com (need to make that a macro)

And take a look around.. You should not pay more than 1% and really, for the most part, most of the mutal funds don't even keep up with the S&P 500. So you can do just fine by putting 30% of your money in say a Vanguard S&P 500 Index Fund. And place the rest in one of the Low Cost funds that morning star recommends that has a higher performance ( and also a higher risk of loss of course).

Good Luck with your investing!

Answer 3

It depends on how well it's doing. You want to substract the gains from the cost and compare it to the SP 500 which is the standard measuring device used by mutual funds. In some instances you get what you pay for and looking at the SP 500 is one way to tell if you did good. Many ETFs (a mutual fund/stock hybrid created by mutual fund companies) have expense rates of less than 1%.

Answer 4

Yes 2% is WAY TOO HIGH! Plus you are investing with AIM and they are Loaded shares class a you pay upfront when you buy class b you pay when you sell c converts to an f after 10 years but they have higher expenses overall. I did a comparison on AIM Global Value B and a somewhat comparable fund from Fairholme. Aim is a global fund while Fairholme is a mid cap so its not an apple to apple comparison but we'll use these two as examples.

Aim Global class b has a redemption fee or defrred load of 5% expense ratio of 2.28% with a yield of .42 and a 5.34 YTD returning.

Fairholme has an expense ratio of 1% NO redemptions fees or front loads yield of .81% and a ytd of 6.35.

Basically what this means is that with every $100 of AIM you lose in the neighborhood of 22.80 in expenses every year. you will also lose 5% of your total when you sell them. With Fairholme every $100 is $10 in yearly fees and since its a no load fund there are no selling fees with them. The yeild is also better meaning you'll get more money for reinvesting every year (in most cases). I used to have loaded funds when I first started but once someone pointed this out to me I found comparable no load funds (and have since migrated to ETF's). Its your money your life but you would be better off with no load funds.

Answer 5

Assuming you do not have to pay any tax when you take out the funds, 2% is not high at all. Sometimes different mutual funds have various levels of operating cost. Some requires you to pay only 1% upfront when you open the account, but each year they charge you a 2%. And when you take out the mutual funds, you have to pay like 3% additional cost. So, usually, it is best to find a fund where you pay higher percentage now, for example 5%, when you open the account, yet you don't have to pay for anything when you take out the money in the end. This would also reduce the total amount of tax you have to pay, because 5% of 2000 dollars is much less than 5% of 20000, assuming your funds would grow in 20 years or so.

Answer 6

In general the average is about 1.5% so 2% is rather high. Compared to index funds which are about 0.5% it is very high. But what is more important is the overall return. If the particular fund has an excellent return, what is a extra 0.5%. Is the return better than 11% annually over the last 5 years?

Answer 7

Hard to say what share class is this if they are C class or no loads to could be a decent fee, if they are load funds this is extreamely high unless we are talking about international small cap investments which would justify this fee.