What are no load mutual funds

Released on = August 20, 2006, 6:10 am

Press Release Author = Suffolk First

Industry = Accounting

Press Release Summary = No load mutual funds are mutual funds whose shares are sold
without a commission or sales charge. The reason for this is that the shares are
distributed directly by the investment company, instead of going through a secondary
party. This is the opposite of a load fund, which charges a commission upon the
initial purchase at the time of sale.

Press Release Body = No load mutual funds are mutual funds whose shares are sold
without a commission or sales charge. The reason for this is that the shares are
distributed directly by the investment company, instead of going through a secondary
party. This is the opposite of a load fund, which charges a commission upon the
initial purchase at the time of sale.

Since there is no cost for you to enter a no-load fund, all of your money is working
for you. If you purchase $10,000 worth of a no-load mutual fund, all $10,000 will be
invested into the fund. On the other hand, if you buy a load fund that charges a
commission of 5% upon purchase, the amount actually invested in the fund is $9,500.
If both funds return 10%, the no-load fund would have grown to $11,000 while the
loaded fund only rose to $10,450.

The major idea behind a load fund is that you will make up what you paid in
commissions with the solid returns that the managers will provide. However, most
studies show that loads don\'t outperform no-loads.

Most load mutual funds are sold through brokerage houses, financial planners, and
people known as \"Registered Representatives.\" With very few exceptions, most of
these people operate on the basis of selling as many fund shares as possible. Their
commissions are collected up front, as a back end charge, or both. Whether you make
money or lose it isn\'t their primary concern. What matters most to these folks is
how often you buy (and generate new commissions for them).

No load funds have traditionally been marketed directly by the mutual fund companies
themselves. But today, more and more funds are being offered through discount houses
like Fidelity, Schwab, and a host of others. The advantage to this is that you have
an unlimited choice of mutual funds in one place. You don\'t have to open a separate
account for each mutual fund family that you purchase.

Most fee based investment advisors have independent relationships with the major
discount firms. They\'re able to offer clients just about any no load mutual fund
that is available. They receive no commissions from the firm and only get paid by
the client according to a pre-determined fee arrangement. Under this type of
arrangement, there\'s no hidden agenda to try to sell you a particular mutual fund in
order to earn a larger commission.



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

Contact Details = Michael Saville

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