fresh YORK -- The appeal of an inde...

fresh YORK -- The appeal of an index permanent fund is that you'll get the same turn back as the broad market. if it be not that because of the high absolute title [i]or[/i] posessions at some funds, the reality is you might not.

If you're shopping for an index capital or if you're already invested in an index supply and you're looking to change, check on the outside the fee calculator at the National Association of Securities Dealers, http://apps.nasd.com/investor Information/ea/nasd/ mfetf.aspx. You can also use the supply to evaluate mutual funds that invest in comparable asset classes. What you find might surprise you.

To view the difference in returns, we picked three large index funds: Fidelity's Spartan 500 Index permanent fund the investor class shares of Vanguard's 500 Index capital and the Dreyfus S&P 500 Index permanent fund We computed what the funds' values would be if we invested $10000 in each, with an assumed 6 percent rate of reply and a 10-year holding period.

in subordination to these conditions, the fund value at Spartan after 10 years would be $1773039 the foundation value at Vanguard's 500 index would be $1758932 and the value at Dreyfus 500 would be $1703725

The fiefs would be $134.92 at Spartan, $24169 at Vanguard and $65874 at Dreyfus.

Of course, there's no indisputable way to predict the hereafter -- a fund can change its give a fee to policy in an instant, the market can stay flat for years, etc if it be not that still, such a wide difference in absolute title [i]or[/i] posessions might come as a surprise to investors who believe all index permanent funds are the same.

DO YOUR HOMEWORK

That's where a little bit of research can go on a long way. Mutual stock research company Morningstar Inc., upon its free Web site, gives succinct reviews of stores Its one line on the Dreyfus fund: "There are cheaper and, hence, better index mutual supplys than this one."

Its line forward Vanguard is, "Are hidden sumptuousnesss cutting into this fund's returns?"

Its line forward Fidelity's Spartan is, "This mutual supply will likely remain tough to beat throughout the long term."

If your solitary investment in mutual funds is between the walls of a 401(k) plan at work, it's worth comparing the index capitals in your plan to other capital companies' index funds. If you find your plan's index stock is overcharging by a significant margin, contact the members of the investment committee at your company and display them your comparison.

If you're considering buying a permanent fund it's worth looking at Morningstar's stewardship grade, which it added in 2004 Morningstar assigns the grade, in part, according to looking at a fund's cost ratio and comparing it with the cost ratio of funds invested in a similar class of assets. It also evaluates whether splendors have gone down as assets have grown which they should, thanks to economies of scale.

Index stocks are essentially fungible, said Mercer Bullard, president and go to the bottom of Fund Democracy, a mutual foundation shareholders' advocacy group. Fund Democracy and the Consumer Federation of America did a meditation of excess fees in 2003

"The higher recompenses provide no additional benefits to shareholders and forward only to reduce investors' recurs and fatten fund managers' profits," Bullard said then.

cost RATIOS VARY WIDELY

The close attention which will be updated later this year, rest that investors paid more than $300 million a year in exces fiefs for index funds and circulating medium market accounts. The organizations began the meditation by asking Morningstar to identify all wealth market and S&P index permanent funds with expense ratios exceeding those forward a comparable Vanguard fund.

Obviously, Vanguard doesn't always have the lowest absolute title [i]or[/i] posessions but the fee on its S&P 500 index supply at the time of the close attention was 0.18 percent. The average charge ratio among funds that charged more was 082 percent 45 times Vanguard's reward Twenty fund companies charged more than 120 percent united charged 2.18 percent.

These higher-cost stores had $59 billion under management; their investors paid $140 million more than they wanted to as a result. in succession the money market side, the cogitation found that investors were paying more than $160 million in exces give a fee tos

"A significant minority of investors are literally throwing their riches away," said Barbara Roper, director of investor protection at the Consumer Federation.

At the time of the contemplation the groups suggested funds be required to disclose the require to be paid [i]or[/i] undergones of comparable mutual funds. That still hasn't happened, which means it's up to you to do the homework it takes to find public if you're in the minority of investors who are throwing their riches away.

Copyright CHICAGO SUN-TIMES 2006

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