Thread: how do the fees work?

Originally Posted by mama_kins

I just wondered how we're charged the fees for each fund. Do everytime we transfer, we get charged, or just how does it work?

(I don't know for sure....but since I had a similar question that I think I answered for myself, I'll take a stab)
Like all no-load mutual funds, I think they take the fees out of the returns. You never miss them, since you never see them.

On a related note: For bond funds held at mutual fund companies, they pay monthly interest, (i.e. dividend), payments. They are either paid to the fund owner, or as more shares via re-investment. The F fund obviously doesn't. So my question was....where do the interest payments go??

I THINK the answer is that they are unnecessary since normally interest payouts also result in 1-for-1 drops in the share price. If you just leave the share price the same, there's no need to make interest payments. The "profits" are the same.

(Someone expound or correct me where I'm wrong. Giving wrong answers is usually the best way to get a right answer).

Originally Posted by mama_kins

I just wondered how we're charged the fees for each fund. Do everytime we transfer, we get charged, or just how does it work?

One of the nice things about the TSP is that the interfund transfers are free and there is no limit on how many trades we make. The only fee that we see is $50 for a loan request.

This issue has always been a question of mine, too. The following was the closest I've come to an answer.

In August 2005 - I watched a recorded TSP "broadcast" mainly about the new L funds. The presenter mentioned that in 2004, the overall TSP administrative costs were ".07% (70 cents per $1000 invested)" - and that the fees for the L funds would be "no more than the average of the current five funds."

Hope that helps,
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