Compare Fund Costs on Web

A new computer program developed by federal regulators allows mutual fund investors to calculate the costs of funds and compare different funds, much like unit pricing helps shoppers compare prices of different sizes of cereal boxes on supermarket shelves.

Many investors don’t realize, for example, that a 1% annual fee will reduce the final account balance in a mutual fund by 18% on an investment held for 20 years.

The Securities and Exchange Commission, led by Chairman Arthur Levitt, has been pushing the mutual fund industry for improved disclosure of fees and risks.

The computer program unveiled Tuesday, called the mutual fund cost calculator, “takes some of the mystery out of mutual funds by enabling investors to evaluate and compare costs,” Levitt said. “And it lets investors see how costs add up in dollars and cents over time.”

The calculator is available on the SEC’s Web site at https://www.sec.gov and through the site of the Investment Company Institute, the mutual fund industry’s trade group, at https://www.ici.org.