What exactly does “no-load” mean?
A. Perhaps first we should define the word “load.” A sales load is a charge imposed on the purchase or sale of mutual fund shares. A load can take several forms. A front-end load is deducted immediately when shares of a fund are purchased, whereas a deferred load is imposed when fund shares are sold. A level load, also known as a 12b-1 fee or trail commission, is charged on an annual basis each year you own the fund and generally takes the form of higher fund expenses and lower yields. Although few mutual funds impose all three of these fees, many charge two of them. Whatever form it takes, the purpose of the load is to pay a sales commission to the investment broker or financial representative selling the mutual fund. Investors considering the purchase of a load fund should ask their broker to explain exactly how the load will be charged. We recommend that you ask specific questions such as, “If I sell this investment within one year, what will my total out-of-pocket expense be?” Reme
