Both mutual funds and segregated funds are subject to certain fees, commissions and taxes. Take special note of any charges that may be due when you buy, sell or switch your funds, and discuss them with your financial advisor.

Fees: Mutual funds and segregated funds collect management fees, usually expressed as a Management Expense Ratio (MER). MERs are calculated as an annual percentage of a particular fund's assets. They pay for the operating, marketing and administrative costs of running a fund, as well as the expertise required to construct it. In the case of segregated funds, the insurance protection that guarantees your investment will also be reflected in your fees.

Commissions: You will also pay a sales commission to your financial advisor either when you buy your funds (a front-end load or sales charge) or when you sell them (a back-end load or sales charge). You can negotiate the amount of a sales commission with your advisor, within a range we specify. Some financial advisors charge a smaller commission for switching your investments from one fund to another.

Taxes: Mutual funds are structured so that any income they earn flows through to investors. In a non-registered plan, taxes may be due on interest, capital gains and dividends you receive, and on distributions paid to you by the fund. Here's what you can expect:

• Taxes on interest: Some funds, such as fixed-income funds, generate interest throughout the year, paying out a sum of money to you monthly, quarterly or annually. This money reflects your fund's earning and is fully taxable.
• Taxes on capital gains: Capital gains can occur when you sell fund units or switch between funds. If the units have increased in value since you bought them, you will have to pay tax on the capital gains.
• Taxes on dividends: Any dividends earned by stocks in a fund are passed on to you. Dividends from Canadian companies are eligible for a dividend tax credit, which can result in favourable tax treatment.
• Taxes on distributions: The fund itself may earn income and capital gains by holding income-generating investments or by selling individual securities that have increased in value. Towards the end of December each year, Mackenzie's funds distribute any taxable income and capital gains they have earned to unitholders. These "distributions" can be paid in cash or reinvested into your fund. Either way, you must pay taxes on them.