Converting mutual funds: The benefits, the risks and the costs

Older mutual funds bought on a deferred sales charge basis lock you in for a number of years, with a penalty for cashing out early, which leaves investors stuck on whether to pay up and switch to something cheaper. This column weighs that decision honestly. The only real reason to break out and eat the penalty is a belief that a lower-cost fund or ETF will outperform by enough to make the switch worthwhile, and the uncomfortable truth is that few active managers reliably beat the market, so a fair bit of the outcome comes down to luck. Rather than swallowing a big penalty at once, Allan points to redeeming the portion you're allowed to take free each year and unwinding the position gradually. It's a grounded read for anyone holding aging DSC funds and weighing the cost of getting out.