Learn about the expenses funds charge and which ones you can avoid. Thinkstock By the editors of Kiplinger's Personal Finance Updated for 2017 Funds offer plenty of benefits to busy investors. Here's a quick review of what they'll cost you. SEE ALSO: Kiplinger's 25 Favorite No-Load Mutual Funds Some mutual funds impose a sales charge when you purchase shares. These loads are essentially commissions that pay the professional adviser or broker who sold you the fund. There are also thousands of other no-load funds. They market directly to the public and have no salespeople. If you choose to research and invest in funds on your own, there is no need to pay this commission. Sometimes the mutual fund tables in newspapers show two prices: the net asset value or "bid" price (the price at which the fund will buy a share back from a shareholder), and the "offering" or "asked" price at which you can buy a share. The offering price includes the maximum sales charge. With no-load funds, the bid price is identical to the asked or offering price. Front-End Loads These charges hit you before your money is even invested and can cost you more than you think. Loads can vary greatly, but 5.75% isn't unusual. If you invest $1,000 in a fund charging a 5.75% load, for example, $57.50 will be subtracted up front and $942.50 will be invested in the fund's shares. A 5.75% sales charge thus works out to about 6.1% of your net investment. Advertisement Deferred or "Back-End" Loads These fees are deducted from your account if you redeem shares before a specified period elapses. The amount of the charge and any conditions under which you may be exempt should be explained in the prospectus, but the language may be confusing. A key point to check is whether your entire interest in the fund or just the amount you originally invested is liable to a deferred charge. If increases in net asset value, capital-gains distributions or dividends are exempt, you know going in the maximum charge you face and that your profits are shielded. Redemption Fees Slightly different from deferred loads, redemption fees are more worrisome if you are investing for capital gains rather than dividend or interest income. A redemption fee is levied against the net asset value when you sell, so it nips profits as well as the amount you invested. Marketing Fees Many funds take a special deduction from assets for advertising, marketing and other expenses, including commissions paid to brokers. These charges are called 12b-1 fees. If a fund charges no sales fee but levies a 12b-1 fee that is greater than 0.25% of assets, by law it can't call itself a no-load fund. Advertisement Management Fees The fund's professional managers are paid an annual fee, commonly 1% or so of the fund's average assets but sometimes much more. (Fees tend to be higher for stock-oriented funds than for bond-oriented funds.) Some funds use an incentive system, periodically adjusting the fee according to the fund's performance compared with the stock market as a whole: The better the performance, the higher the fee. Nevertheless, all funds charge a management fee. QUIZ: Test Your Investing IQ The best way to compare management and 12b-1 fees between funds is to look at their expense ratios. These figures are calculated by totaling the management and 12b-1 fees (but not loads) and dividing them by the fund's total assets.