ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -B-class share funds typically charge higher ongoing annual fees than A-class share funds. C-class shares may carry commissions charged every year you own the fund or they may have a back-end sales load similar to B-class shares.

Detailed explanation-2: -Actively managed funds typically have higher expense ratios because investors are paying for the potential to have a higher return. In contrast, passively managed funds like index exchange-traded funds typically have lower expense ratios because they only aim to perform as well as the overall market.

Detailed explanation-3: -This is because an actively managed fund is conducting ongoing research trying to determine the best securities to own. This research costs more, but statistics show that you don’t necessarily get what you pay for. 1.

Detailed explanation-4: -Active mutual funds typically have higher fees than index funds. Index fund performance is relatively predictable; active mutual fund performance tends to be less so.