Funds of funds face expense rule change

[sweeps]

Funds of funds face expense rule change

Mutual funds that invest in other funds can bring diversity to a portfolio, but can also add layers of expenses. A new rule requiring so-called funds of funds to tabulate costs from underlying funds could result in surprises for some investors.

Previously, funds were required to list only the expenses added at the top — the funds of funds level. Under the new rule, which takes effect with the new year, investors could see expense ratios of their funds of funds jump....

Many larger funds of funds, like those run by Vanguard Group, won't show a change in their expense ratios as many of the funds of funds they offer are built using in-house products. Vanguard's Total International Stock Index fund, for example, doesn't impose expenses of its own. The fund is made up of other Vanguard funds and the company can therefore simply absorb administrative costs for running the fund of funds.

[PRICEPLUS]

Thanks for the heads up!

[pearlieq]

Thanks for the info!