no load mutual funds

No Load Mutual Funds

Brokers usually have a right to charge commission on the purchase of shares. But No Load Mutual Funds as their name suggest are mutual funds that don't charge you large fees in order to invest in them. They still have a couple small fees but not nearly as much as load mutual funds carry.

It is a fund that typically can be purchased without commission. The reason for this is that the shares are distributed directly by the investment company, instead of going through a secondary party. Since there is no cost for you to enter a no-load fund, all of your money is working for you.

No-load Mutual Funds are available for purchase without an upfront sales charge, but there is usually a charge when you liquidate or redeem your shares. The mutual-fund industry has done a wonderful job at selling no-load funds as the only investment that makes sense for small investors. No load funds are available in various categories such as mid-cap funds, large-cap funds, value funds, and bond funds. You can choose any category according to your interest. But make sure that fund is performing best from last three to five years.

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Submitted by admin on Thu, 2006-11-16 08:32.

Information About Mutual Funds Loads

A load is the fee or sales charge that an investor has to pay to buy certain mutual funds. Simply you can say load is a sales commission charged by mutual fund on the purchase or sale of securities by investors. Not all mutual funds have loads. Funds without loads are called No load mutual funds.

Brokers charge front-end loads when you purchase the securities. They fix a specific percentage of front-end load and such amount is deducted from your fund when you make investment. The value of the investment is then reduced by the amount of the load.

Funds that have back-end loads don’t charge any fee at time of purchase of shares but when you sell your shares, you have to pay some fee. Back-end load is a sales commission that a mutual fund company charges at the time of redemption of your shares. In level load funds no sales charge is paid when buying the shares, but a back-end load may be charged if the shares purchased are sold within a year.

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Submitted by admin on Thu, 2006-11-16 08:26.