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.
2022
