These types of transactions generally incur additional costs or fees. However, there can be legitimate reasons when a substitution fund is appropriate. Often new closed-end funds are formed to address timely investor needs. A newly issued closed-end fund will be priced at NAV plus a spread, which includes a commission. Thus, research is necessary to select the best alternative and to understand the price of each alternative.
Mutual funds are usually the preferred method of investing internationally.
Investing globally may involve additional risks including currency fluctuations, possible political and economic instability, and different financial accounting standards. As you can see, with their well-deserved increased popularity, decisions concerning the selection of mutual funds are complex. Hence, it is important that a client consider all these factors in light of his or her individual needs and objectives, and in conjunction with his or her Financial Advisor. Inc. All rights reserved.