You can invest in mutual funds through a fund network, sometimes called a
mutual fund supermarket. Brokerage firms put together networks to simplify the process of opening and keeping track of multiple mutual fund accounts and to give you easy access to funds offered by many — though not all — of the major fund families.
In most fund supermarkets, you pay no sales charges or transaction fees at purchase or when you move assets from one fund to another. But that doesn't mean there are no costs. The sponsoring firm charges the fund companies a fee to participate, which the fund companies typically cover with 12(b)1 fees or expense fees charged to everyone investing in their funds.
Critics also point to the reduced distributions some participating funds make as another hidden cost of investing through a fund network.
Diversifying your funds within a fund family or network is a good way of limiting charges and exchange fees when you transfer assets from one fund to another. However, redemption fees may still apply to certain volatile or aggressive funds to discourage investors from trading in and out of them.
You can invest in mutual funds through a fund network, sometimes called a
