Originally posted at Cake Financial.
Last week I received the prospectus for Mutual Discovery, a much-lauded fund during the tenure of Michael Price, then David Winters.
The fund has 5 share classes, with front-loaded Class A shares comprising the bulk of the assets. I own Class Z shares, purchased on my behalf in 1996, which have been grandfathered in to significantly lower expenses than other classes.
Using FINRA’s Mutual Fund Expense Analyzer, I was able to forecast the return spread for Class Z vs. Class A in 20 years.
It’s significant. But is it worth it?
I’ve just started to put my portfolio together and am considering selling Mutual Discovery. My back-of-the-envelope analysis says that the price I’d get from Franklin Templeton is not as good as I could get from, say, a Class A investor in the same fund or anyone else looking to buy.
Mutual fund sales, unfortunately, do not work that way. The only way I could get that premium is by transfering the shares to someone who is willing to pay me for the favor. But, by then, I will probably have spent the upside in time and hassle.
