March 15, 2004
Forms seem complex and confusing. For example, it is not clear what revenue sharing means, or with whom it is shared. The difference between the amount invested and the NAV is the front end load for Form A. But that amount does not equal the sum of the load plus commission plus revenue sharing etc. So that is confusing. Does the NAV include broker commission?
I feel you should start with a reference price which is the market price of the underlying stocks in the mutual fund. Then add each cost component and show who receives that component. What is the average fund transaction cost, the add-on for soft money research, the load etc.? Then sum the accumulated costs at various points. For example the NAV would be one intermediate summing up point.
The investor wants to understand the build up of total costs, so he/she can see who all is at the feed trough.