I’m a DIY investor, why does my mutual fund pay trailer fees?
Trailing commissions (or trailing fees) are a payment of money that is part of a continuing series of payments to a participating dealer. Payments may vary depending on the mutual fund series invested in (denoted by a letter — for example, Series D). These payments are intended to cover services of any kind in connection with a client’s ownership of mutual fund securities. Not every fund pays trailing commissions, but some do.
Read a mutual fund’s disclosure documents — located in a mutual fund’s Fund Facts and in its simplified prospectus — to understand the series of fund and associated fees and expenses before making an investment decision.
The resources on GetSmarterAboutMoney.ca will help to build knowledge in this and other areas including, how fees and other costs can affect your investment. Speak with a registered financial representative or tax professional for personalized advice.