What are No-Load Funds?
No-load funds are mutual funds that do not charge investors sales fees or commissions. When an individual purchases shares of a no-load fund, the entire purchase amount goes towards the investment. For example, if the individual puts $5,000 into a no-load fund, that entire $5,000 is invested. Not a single penny is spent on paying a commission or sales charge. Load funds are the direct opposite of no-load funds. In a load fund, the seller of the fund shares, often a broker, receives a load. The term load refers to the sales commission paid to the seller. The individual, group, or company responsible for the management of the fund does not receive a load. Therefore, a load has no real ability to encourage a fund manager to do a better job. Instead, a secondary party benefits monetarily for assisting the investor in buying shares of the fund. If an investor chooses to purchase a load fund instead of a no-load fund, he is actually choosing to give away a portion of his money. For example,
A no-load fund is a mutual fund that does not charge a sales fee, commonly called a “load.” Shares in most no-load mutual funds are sold directly by the fund through advertising. Money market mutual funds, even those sold by banks and stockbrokers, are virtually all no-load. Over the years, no-load funds have generally outperformed load funds, largely due to the lack of a sales commission. Does a load fund guarantee any better return than a no-load fund? Over the years, no-load funds have generally done as well or better than load funds. Because load funds can charge up to 8.5% of the amount you invest when you buy shares, it makes sense in many cases to save the commission and buy no-load funds. What are Class B mutual fund shares? Class B shares are mutual fund shares that usually have a back-end load rather than a front-end load. If you buy shares in a traditional load mutual fund, you usually have to pay an upfront sales commission. But with Class B shares, the commission is tacked
A no-load fund is a mutual fund that does not charge a sales fee, commonly called a “load.” Shares in most no-load mutual funds are sold directly by the fund through advertising. Money market mutual funds, even those sold by banks and stockbrokers, are virtually all no-load. Over the years, no-load funds have generally outperformed load funds, largely due to the lack of a sales commission.
