What are mutual fund loads

Released on = April 12, 2006, 7:00 am

Press Release Author = Suffolk First

Industry = Accounting

Press Release Summary = Loads are the most talked about fees that mutual funds
charge. A \"load\" on a mutual fund is just another way of saying that the fund
charges a sales commission for purchase, sale, or both. There are funds that charge
loads and there are funds that do not charge loads (known as \"load funds\" and \"no
load funds\" respectively).

Press Release Body = The start of a new tax year is always an important time for new
investors. It is important to make the most informed decision you can when deciding
to invest. This includes having an understanding of the fees charged by brokers and
the managers who look after your funds. Their fees can quite easily wipe out your
profits.

Loads are the most talked about fees that mutual funds charge. A \"load\" on a mutual
fund is just another way of saying that the fund charges a sales commission for
purchase, sale, or both. There are funds that charge loads and there are funds that
do not charge loads (known as \"load funds\" and \"no load funds\" respectively).

Front-end loads are sales commissions that are paid up front at the time of your
purchase. So, if you give a fund a $10,000 investment and it charges a front-end
load of 5%, then the fund will take 5% of your investment (that\'s $500) and pocket
it right away. Only what is left over after the load has been deducted will be
invested into the fund (in this example, only $9,500 is invested in the fund from
your initial $10,000 investment)

Back-end loads charge their sales commissions when you sell (or \"redeem\") your
shares. So, when you go to redeem your shares in a fund with a back-end load you
will end up receiving whatever money the shares are worth minus the sales
commission.

Mutual funds charge management fees in order to pay for the management services used
to run the fund. In other words, these fees are used to pay the salaries of the
fund\'s managers and analysts. Management fees usually do not amount to more than one
percent of the fund\'s assets, and they are significantly lower for passively-managed
funds, such as index funds, than for actively-managed ones. You should remember that
a high management fee in no way guarantees a more skilful management team.



Web Site = http://www.buy-mutual-funds.com

Contact Details = Michael Saville

  • Printer Friendly Format
  • Back to previous page...
  • Back to home page...
  • Submit your press releases...
  •