If you own a mutual fund or if you're thinking about investing in one, perhaps for the first time, the one thing you absolutely need to do is pay attention to fees and expenses.

That's what the experts keep telling us. However, for the novice investor -- and that's what most of us are -- figuring out how to compare the cost of one mutual fund with that of another can be as difficult as reading Latin.

But NASD, the private-sector regulator for the securities industry, has introduced a new and improved mutual fund expense analyzer. After using it, I feel like yelling "Eureka."

NASD's expense analyzer, which can be found at www.nasd.com, replaces a previous version that required investors to manually enter quite a bit of information, such as sales charges and operating expenses.

"We thought we had a pretty decent tool out there, but it suffered from a couple of problems," said Elisse Walter, NASD's executive vice president for regulatory policy and programs. "Investors had to do too much work."

The online tool now contains up-to-date fee and expense information on practically all of the more than 18,000 mutual funds and 160 Exchange Traded Funds (ETFs), NASD said.

There are several things about this analyzer that should make it the first stop before you invest in a mutual fund. First, it's easy to use.

You don't even have to know the exact name of the mutual fund. You can find the mutual fund you're interested in by using a general fund name, such as American Funds or Calvert Funds or Vanguard Funds. Or you can search for a mutual fund by using a key word such as "growth" or "large-cap."

With this tool you can simultaneously compare expenses of up to three ETFs or mutual funds, or three share classes of the same fund. The expense analyzer will also estimate and graph a fund's value and expenses up to 20 years out.

"You can see very quickly how a small difference in the fees or expenses can cost you a lot of money over years, and you see it in real dollars and cents," Walter said.

Do take the time to do the tutorial. The analyzer is fairly self explanatory, but there are a few places you may be a little confused.

For example, NASD should explain a little better that in the space for "rate of return," investors should type in an estimated return they expect for the funds selected. Obviously, for comparison's sake, you enter one rate of return. If you put in a rate higher than 10 percent you get a note that says such a rate is above historical market averages.

However, don't worry so much about what return you input.

"It's a hypothetical number anyway since you're always guessing what a fund's performance will be in the future," said John Gannon, NASD's vice president for investor education. "Past performance is no indication of future returns. But the one factor you can control is expenses."

Along with expense and fee information, NASD has a new search tool that will allow investors to research what discounts, known as breakpoints, and waivers may be available on purchases of Class A mutual fund shares. These also can have an impact on your return, Walter said.

Mutual funds typically offer sales-charge discounts for substantial investments -- usually $50,000 or more, NASD points out. The size of the discount typically increases at various breakpoints -- for instance, at $100,000, $250,000, $500,000 and $1 million.

I know what you're thinking: "I don't need that tool because I don't have that much in a mutual fund." Maybe not now, yet over time your portfolio may grow big enough to earn one.

In addition, mutual fund families typically allow a customer to link ownership of different funds in the same fund family to reach a breakpoint amount, and to link purchases of fund shares with shares owned by related persons, such as your spouse, Walter said.

The breakpoint search tool was created specifically because the regulators found that many investors were not receiving breakpoint discounts to which they were entitled.

When regulators discovered this, an industry-wide refund program was implemented and a number of enforcement actions were handed down by NASD and the Securities and Exchange Commission.

NASD said its crackdown has led to more than $130 million in restitution to investors who had not received their discounts.

Here's the thing: More than 50 million American households have money in mutual funds. What NASD has done is to go beyond just telling investors they need to scrutinize fees and expenses before investing in mutual funds. The regulator has provided a much-needed tool to help people put that advice to action.

And there's another major plus to NASD's expense analyzer.

"It's a neutral source of information from somebody whose job it is to protect investors," Walter said.

So get to analyzing. You'll find that fees do matter.

* On the air: Michelle Singletary discusses personal finance Tuesdays on NPR's "Day to Day" program and online at www.npr.org.

* By mail: Readers can write to her at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071.

* By e-mail: singletarym@washpost.com.

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