Unloading a loaded mutual fund
October 25, 2005 12:03 PM Subscribe
FinancialFilter: Should I sell my DSC mutual funds now or later?
posted by acoutu to work & money (8 answers total)
I have some mutual funds that have deferred sales charges. About half of them will be free of the 3% DSC at the end of 2006. The remainder expire in 2007 (those carry 4.5% blended rate DSC right now).
I've held these funds since 2000. They haven't gained at all since then, since some sustained enormous drops in the post-9/11, post-Nortel world, offsetting everything else. A CFA I know recently suggested I sell my funds and put them into ETF. I had been planning to put my funds into ETF when all the DSC expire. However, this guy (who has only a casual acquaintance and nothing to sell me) said that, if I sell and lose the DSC, I'll make it back on the ETF returns, since they have no MER (management expenses).
I know it was stupid to buy funds with DSC. But the financial planner who originally sold these funds was a close friend who convinced me these funds would provide higher returns than the no-load funds at my bank. He also provided incorrect information about when the DSCs would expire. I recognize all this as a mistake now, and so please don't feel a need to lecture me on my stupidity.
What I really need is to know whether I should sell now or wait till some or all of the DSC expires. It's not a small sum of money, so I'm not dickering over $25.