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No Load Mutual Funds do not chage commissions when you buy them. That is why they are called "no-load." Funds that are
traditionally sold through brokerage firms are "load" funds, where the broker is paid a commission when the fund is sold to
you. The commission is usually about 5%, which will come off the top of your investment for many funds. Class B and C shares
where created to defer a portion of the commission over a period of several years, because investors don't really like to see
their first statement showing a reduction of 5% due to the load.
So, which funds are better to buy - No Load or Load? In the end, it really doesn't matter unless you plan on buying
and selling alot. If you are going to hold for the long-term, the commissions really shouldn't be a concern. If you want to
trade alot, you should go for the No Load Mutual Funds or the commissions will eat through your capital. In the end, you
want to look at the track record of the fund and not base your decision on the commission issue.
We hope the resources below can help answer your questions on: No Load Mutual Funds:
LOAD vs. NO-LOAD FUNDS - AAII.com
The bottom line in any investment is how it performs for you, the investor, and that performance includes consideration of all loads, fees, and expenses. There may be some load funds that will do even better factoring in the load, but you have no way of finding that fund in advance. The only guide you have is historical performance, which is not necessarily an indication of future performance. With a heavily loaded fund, you are starting your investment with a significant loss-the load. Avoid unnecessary charges whenever possible. Say 'No' to Loaded Mutual Funds - About.com Stock brokers and insurance salesmen might try to convince you otherwise, but there really is no reason to ever buy a loaded mutual fund. Learn why you should stay away from loaded funds and how to spot them. The Advantage of No-Load Mutual Funds - by Jack Piazza One of the basic decisions that every mutual fund investor must make involves the issue of fund structure: whether to choose a load or a no-load fund. Advocates of each type give the following arguments: load funds are necessary to compensate for research and advice; no-load funds save you money by eliminating unneeded expenses. Load vs. No-Load Funds - by Yahoo Finance Let's first review the different types of mutual fund structures. Load funds charge a commission while no-load funds are commission-free. The structure of load funds can be (1) front-end with the commission varying from 3 to 6.25 percent of the investment, or (2) back-end, also known as redemption, with the commission usually at 3 percent of asset value when sold. In addition, pratically all load funds charge annual distribution fees, also referred to as 12b-1 fees, which are used to pay for promotional costs. These costs vary from 0.25 to 0.75 percent of annual asset value. Some no-load funds also charge 12b-1 fees, but no-load funds that do not charge 12b-1 fees are known as 100 percent no-load or true no-load. More than 100 of the largest load funds and their no-load alternatives! - fundadvice.com On this page you’ll find an alphabetical list of more than 100 of the largest load mutual funds, each followed by a no-load equivalent fund that we believe is a better alternative. A load is simply a sales commission that is subtracted from your investment when you buy the fund shares or withdraw your money. In addition, some funds impose sales loads in the form of higher expenses charged against investors on a daily basis. Class B Mutual Fund Shares: Do They Make the Grade? - NASD Buying mutual funds through a broker or other investment professional usually means choosing among different mutual fund classes. The only differences among these classes is how much you will pay in expenses and how much your broker will be paid for selling you the fund. NASD is issuing this Alert because we are concerned that investors may purchase Class B mutual fund shares when it would have been more cost-effective for those investors to purchase a different class of shares. Best No Load Mutual Funds: Looking at Mutual Fund Fees and Expenses the Right Way - by AlphaProfit In their quest for the best no load mutual fund, some mutual fund investors tend to select mutual funds based solely on fees and expense ratios. Is this always a good way to select mutual funds? This 'Tax' on Mutual Funds Could Give You Superior Returns - By Ric Edelman Academics and market experts know that the best way to make money from investments is to hold onto them for long periods of time. Yet many investors insist on frequently jumping in and out of mutual funds. How do you stop this activity? By assessing a cost to either buy or sell the fund … kind of like a "transaction tax." Does the presence of such a fee work — does it prevent investors from trading, and does it help investors boost their profits? You betcha! Mutual Fund Expenses - by Wiser All mutual funds charge you some fees to cover on-going expenses. These expenses will cut into the amount of money that you make from the mutual fund.
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