A mutual fund is a communal pool of money from investors that is used to collectively purchase investments; each shareholder owns a percentage of the investments in the fund. When you buy a fund, you may have to select the type of share class you wish to purchase. Share classes don't change the investments in the fund, but they do carry different sales charges. A Series F mutual fund is the way to buy certain funds through fee-based advisers.
TL;DR (Too Long; Didn't Read)
A Series F mutual fund is a class of mutual fund that requires going through a fee-based adviser to make a purchase. This type helps to avoid a conflict of interest and does not involve commissions.
Load vs. No-Load Funds
Mutual funds are sold either with or without a sales charge, known as a "load." Loaded funds pay commissions to advisers, while no-load funds do not.
An F series mutual fund is a special type of loaded fund you can buy without paying a sales charge. F series funds are only available through fee-based advisers, not from commission-based advisers. Since F series funds do not pay commissions to advisers, they also come with lower annual fees.
Origination of Series F Funds
Series F mutual funds came to the investment world as a way to help avoid conflicts of interest. Traditional commission-based financial advisers have an incentive to steer investors towards high-commission products, as that is how they are paid. Fee-based advisers, on the other hand, make their money from annual fees, regardless of the number or type of products that investors buy. Since the adviser receives the same fee whether you buy the F series fund or another fund, it reduces the risk that the adviser is acting in his own best interest, instead of yours.
Other Share Class Types
No-load funds do not have share classes. You simply don't pay a commission on them, whether you buy or sell the fund. Loaded shares often have A shares, B shares and C shares.
An A share fund will charge you an upfront fee when you purchase it, while a B share fund will charge you a fee of up to 6 percent if you sell the fund, usually in the first six years after you buy it. C share funds typically charge an additional 1 percent per year in internal expenses, but they have no charges to buy or sell the fund.
Total Cost of F Shares
While an F series fund can cost you nothing in upfront fees, it can prove to be an expensive proposition over the long haul. Since your fee-based adviser most likely charges you a percentage of your total assets year in and year out, you are essentially paying an annual fee on the fund, albeit to your adviser and not to the fund company. While you may get overall value from your adviser that makes the annual fee worth it, you must include the cost when comparing your investment expenses with simply buying a no-load fund on your own.
References
Writer Bio
After receiving a Bachelor of Arts in English from UCLA, John Csiszar earned a Certified Financial Planner designation and served 18 years as an investment adviser. Csiszar has served as a technical writer for various financial firms and has extensive experience writing for online publications.
FAQs
Fee-based mutual funds (series F units)
When an investor buys a mutual fund in a fee-based account they will purchase series F units of the fund. Series F units are only available in fee-based accounts as they do not include a trailing commission as a component of their MER.
What is an F series mutual fund? ›
Fee-based mutual funds (series F units)
When an investor buys a mutual fund in a fee-based account they will purchase series F units of the fund. Series F units are only available in fee-based accounts as they do not include a trailing commission as a component of their MER.
What are RBC Series F funds? ›
Series F/FT
No-load funds available to investors who have a fee-based account. Instead of paying for advice and other services via a trailing commission, investors pay ongoing account fees to their dealer separately. These funds pay management fees to RBC GAM.
What is the difference between a series and F mutual funds? ›
Series A mutual funds include a trailing commission paid by the mutual fund company to the investment firm the advisor works for (investment dealer) for ongoing advice, access and service. Series F mutual funds are used in fee-based accounts, where the trailing commission is replaced by an account fee.
What is a portfolio F? ›
What Is a Financial Portfolio? A portfolio is a collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including closed-end funds and exchange traded funds (ETFs). People generally believe that stocks, bonds, and cash comprise the core of a portfolio.
Is the F fund good? ›
Is the F Fund a good investment? It's a good investment if your investing goals are in alignment with the objective of the F Fund, which is for diversification, lower risk than the G Fund, and capital preservation. But it still has risks just like any investment.
What are F series accounts? ›
Fee-based mutual funds (usually called Series F Funds) are designed specifically for use in accounts where you pay your advisor's firm (mutual fund dealer) directly for the advisory services they provide to you. There is no trailing commission in a fund designed for a fee-based platform.
Who can buy F Series funds? ›
Series F units of mutual funds tend to be available only through a financial representative, often through a fee-based account where you pay a single annual fee for services. Typically advisors who offer this type of service are registered in the category of “Portfolio Manager”.
What is the difference between F series and A series? ›
Samsung's A, M, and F series are designed to cater to different market segments with varying needs and budgets. The A series is the premium mid-range lineup, with a focus on design, display, and camera features. It generally offers better specs than the M and F series and is more expensive.
What is the difference between Series O and Series F? ›
TD's o-Series funds are no-load investments with high minimums; its e-Series funds are no-load funds specifically for its brokerage clients who buy online, while the bank's f-Series funds target clients with fee-based financial advisers.
F-class funds typically have management expense ratios that are a full percentage point or more lower than conventional mutual funds. With an F-class fund, the sponsoring company effectively has removed the advice portion of the fund's MER; the investor pays that fee directly to his or her advisor.
What are the 5 types of portfolio? ›
Types of Portfolio Investment
- The Aggressive Portfolio.
- The Defensive Portfolio.
- The Income Portfolio.
- The Speculative Portfolio.
- The Hybrid Portfolio.
- Conclusion.
Thrift Savings Plan F Fund Monthly Returns (I:TSPFFMR)
Thrift Savings Plan F Fund Monthly Returns is at -0.63%, compared to -0.07% last month and -2.80% last year. This is lower than the long term average of 0.44%.
What is the difference between the G fund and the F fund? ›
The F Fund (bonds) and the C, S, and I Funds (stocks) have higher potential returns than the G Fund (government securities). But stocks and bonds also carry the risk of investment losses that the G Fund does not have.
