Costs
Fees and Expenses

Homestead Funds are offered at no-load, meaning no sales charge is deducted from your investment. There are no transaction fees, except a redemption fee that is intended to minimize frequent short-term trading—or market timing. This 2% fee is charged only if you sell or exchange stock fund shares within 30 days of purchasing them. The fee is paid to the fund from which you took the redemption—not to the fund company. The redemption fee does not apply to money market or bond fund transactions.

Operating expenses cover the cost of running the fund and include investment management, accounting, legal and compliance services, recordkeeping and statement production. All mutual funds incur expenses. Homestead Funds expenses are in line with or below their peer group average, as determined by Lipper for the period ending December 31, 2010.

Annual Custodial Fee for IRA and ESA Accounts

Homestead Funds’ custodian charges a $15 annual account fee to cover the extra costs associated with maintaining fiduciary accounts—Individual Retirement and Education Savings Accounts. The fee is deducted automatically from your account in the fourth quarter or at the time your account is closed.

A fee is assessed for each type of fiduciary account registered to the same Social Security Number—not by fund. For example, if you have a Traditional IRA and a Roth IRA, you would pay $30 in annual custodial account fees, regardless of the number of funds you own in each account.