For most investors, the idea of buying a mutual fund is easy. After you choose a fund and appropriate share class, you send the fund company a check, and within a few days you’re the proud owner of the fund. It’s simple, and while it differs slightly from buying an individual stock or exchange traded fund (ETF), the process is relatively the same. But what happens when you sell your mutual fund?

It’s here that mutual funds and stocks/ETFs completely differ. While it is a difference process, it’s still a relatively simple one. Selling a mutual fund involves a few different steps, but the end result is the same. Read on to find out more about the process.

Be sure to also read the 7 Questions to Ask When Buying a Mutual Fund

Designed as a longer term investing vehicle, the process for selling a mutual fund reflects that focus. The first step is placing a simple “sell order” just like a stock or ETF. For most funds, this can be done online or over the telephone. However, unlike a stock or ETF, the order isn’t placed immediately. A key feature and difference is that mutual funds do not offer intraday tradability. Stocks and ETFs rise and fall over the course of a single day, which investors can capitalize on.

On the other hand, mutual funds are priced at the close of business. For investors wanting to sell that day, the order must be placed before 4 pm, when the stock market closes. Keep in mind that some fund companies and brokerage firms will require an earlier cut-off period to allow for sufficient time for the sale to go through. Sometimes that can be as early as noon.

After the markets closes, a broker at the fund’s distributor will execute the sale of the fund at the day’s net asset value (NAV). The NAV is essentially the daily value of all the assets of the fund minus the fund’s liabilities. This number is then converted to a quoted per-share price.

Unlike an ETF—which is passive and generally tracks indexes—mutual funds are constantly buying, selling and exchanging their various holdings each day. Not to mention dealing with investors’ redemptions and additions. Given that they hold sometimes hundreds of individual securities, it can be a vastly complex undertaking to figure out an instant NAV throughout the day. Therefore, the end of the day NAV is used to calculate buys and sells of the fund’s shares.

When the end of the day hits and the NAV is calculated, investors have officially sold their shares and are distributed a check or direct deposit. Mutual funds generally keep a cash cushion to meet investor redemptions without being forced to sell stocks or bonds to pay for the outflows.

See also What is a Mutual Fund?

The end of the day NAV is one of the main differences between selling a mutual fund and selling a stock/ETF. Nevertheless, there are several other issues to consider; a big one is fees.

Regardless of share class, some mutual funds charge early redemption fees if shares are sold before a certain time. Many international, esoteric bond and other specialized funds generally charge these fees, which is either expressed as a percentage of dollars sold or a flat fee. It is typically 2% or in the $45-$90 range. The idea behind the fee is to discourage short term trading and to prevent fund managers from selling holdings to meet redemptions.

Learn more about What Are Share Classes?

Another fee investors need to be wary of is deferred sales charges on C class shares. C class shares come with a 1% back-end sales load that is taken out of proceeds when shares are sold. This charge usually goes away after the shares have been held for more than a year.

Another issue can be a NAV breakpoint. An investor with a very large stake in a mutual fund can actually alter and reduce the NAV if they decide to sell their entire stake at once. Fund managers could be forced to sell assets in order to meet the redemption and cause the underlying value of the fund to drop. Typically, investors wanting to pull more than $1 million out of a mutual fund must do so in several steps to avoid breaking the fund’s NAV. The NAV breakpoint is outlined in a fund’s prospectus.

Finally, selling a mutual fund can have some tax considerations as well – especially if the fund is held in a regular taxable account. Capital gains are owed when an investor finally sell his or her shares of a fund. For most investors, the default way mutual funds calculate gains is through an average cost basis method. A fund company will keep track of your buys, average the price and figure out the difference between that buy price and the sell to get the gain owed.

See also The Cheapest Mutual Fund for Every Investment Objective

However, investors can choose other methods for their cost-basis reporting – such as FIFO and specific lot sales. Each of these methods comes with different long and short term capital gains tax issues. Investors looking to use one of these methods must be aware of how their sells will affect their wallets come tax time.

While they are designed to be longer term vehicles, eventually investors will need to sell a mutual fund and use the proceeds. The process isn’t complicated, but it does have a few key differences versus selling an individual stock or exchange traded fund (ETF). Understanding how these differences—such as NAV calculation, taxes and fees—work is critical to utilizing the investment vehicle properly.