Vanguard also compensates most of its outside managers with performance-based fees.

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New and renegotiated contracts these days tilt the balance more toward performance-based fees: often just 1% of revenues and up to 12% of profits (and sometimes only net profits at that).

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Hardly a single mutual fund company with a sales load structure could justify offering only its own mutual funds to its employee 401(k), based upon fees and performance.

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It is difficult to know exactly how much of that compensation was performance-based and how much came from fees.

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One mutual fund that Rosenbluth recommends based on this criteria of performance, fees and risks is the Invesco Diverisified Dividend Fund (MUTF:LCEAX).

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All returns cited are based on gross performance before advisory and transaction fees but net of fund or ETF expense ratios.

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All returns cited are based on gross asset class performance before advisory, transaction or other fees.

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