What type of fees may impact the Net Asset Value of a UITF?

The impact of various fees on the Net Asset Value (NAV) of a Unit Investment Trust Fund (UITF) is an important consideration for investors. Management fees, taxes, and other expenses are crucial components that directly affect the NAV.

Management fees are charges applied for the operational oversight and decision-making activities of the fund. These fees ensure that the fund is managed effectively, but they reduce the overall value of the fund by being deducted from its assets. Taxes can also affect NAV, as they can be incurred based on the fund's earnings and capital gains. Additionally, other expenses—such as administrative costs, custodial fees, and legal expenses—are part of the operational expenditures of a UITF, which also diminish the fund's NAV.

While performance-based fees, advertising and marketing fees, and brokerage fees might have their own implications, they are not typically classified under the primary expenses that affect a UITF's NAV as directly as management fees, taxes, and general expenses. Such fees may vary in their impact depending on specific circumstances but do not contribute as consistently or predictably to the NAV reduction as the correct choice.