Chapter 10. Conflicts of Interest

People in the industry have financial incentives to sell investors mutual fund shares, even when such shares are not the best alternative for particular investors. This is compounded by the fact that the industry has devised various classes of mutual fund shares to try to entice more investors, but the result is confusion on the part of many investors who end up paying more than they might otherwise because they chose the wrong class of shares.

A rule adopted by the SEC in 1995 makes it possible for mutual funds to offer multiple share classes representing a claim on the same underlying portfolio of securities. For reasons covered next, since that time most fund complexes that sell load funds now offer multiple ...

Get Mutual Funds: Your Money, Your Choice... Take Control Now and Build Wealth Wisely now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.