I saw an ad in today’s Wall Street Journal by Columbia/Bank of America Funds stating that they are #1 in Barron’s 5-Year Mutual Fund Family Ranking. I immediately smelled a rat and began reading the fine print. A different story emerged:
- They are #17 over a 10-year period (a better indicator of long-term performance)
- They excluded 12b-1 fees (pays for ads “like the one in the WSJ, and payments to brokers and others to sell their funds) and sales charges (commissions) from the calculations.
- They stated the following: Had 12b-1 fees or sales loads been included, rankings would have been lower.
The next time you want to buy a Columbia mutual fund sold by a broker make sure to tell him you want that without sales loads or 12b-1 fees, and see what the broker says.
Unfortunately for people who buy these loaded overpriced funds — this ain’t Burger King and you can’t have it your way.