Expatriates who invest in offshore mutual funds are likely paying high 12b-1 fees.  These fees are very confusing and erode investor returns.  Exchange Traded Funds DO NOT have 12b-1 fees, another reason I prefer ETFs to traditional mutual funds.   For expatriates, ETFs bought in an offshore brokerage account would eliminate these unnecessary fees.

USA Today article:  The Securities and Exchange Commission on Wednesday voted to revamp fees that most mutual funds charge to cover sales and distribution costs, and that have become a source of confusion for investors and industry insiders alike.

Revenue from so-called “12b-1″ fees can be used for a wide range of fund services beyond upfront sales costs, and an investor can pay the fees for years after they’ve gotten into a fund, eroding returns. Even industry pros find 12b-1s confusing, because funds can use the fee revenue in so many different ways.

Read more at: http://www.usatoday.com/money/perfi/funds/2010-07-21-mutual-fund-fees_N.htm