No-load mutual fund

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No-load mutual fund

An open-end investment company whose shares are sold without a sales charge. There can be other distribution charges, however, such as Article 12B-1 fees. A true no-load fund has neither a sales charge nor a distribution fee.

No-Load Mutual Fund

A mutual fund that does not charge shareholders a sales charge or commission. Some no-load funds charge a distribution fee, which is a small percentage of the amount one invests used to cover the fund's costs. Other no-load funds, however, do not have distribution fees. Some investors prefer no-load funds because the total amount of their investment is used to purchase shares with little or no deduction. Studies have shown that no-load funds perform neither better nor worse than load funds. See also: 12B-1 fee.

No-load mutual fund.

You buy a no-load mutual fund directly from the investment company that sponsors the fund. You pay no sales charge, or load, on the fund when you buy or sell shares.

No-load funds may charge a redemption fee if you sell before a certain time has elapsed in order to limit short-term turnover.

Some fund companies charge an annual fee, called a 12b-1 fee, to offset their marketing costs. Your share of this fee is a percentage of the value of your holdings in the fund.

You may also be able to buy no-load funds through a mutual fund network, sometimes known as a mutual fund supermarket, typically sponsored by a discount brokerage firm. If you have an account with the firm, you can choose among no-load funds sponsored by a number of different investment companies.

Load funds and no-load funds making similar investments tend to produce almost equivalent total returns over the long term -- say ten years or more. But it can take an investor nearly that long to offset the higher cost of buying load funds.

References in periodicals archive ?
You can find no-load funds in just about any category--mid-cap funds, large-cap funds, value funds, and bond funds--so, no matter which area you have an interest in, you should be able to find one that suits your investment style.
With the preponderance of no-load funds, along with their vast advertising and promotional budgets, one might expect that most sales would be direct.
Books on low-cost or no-load funds, available at many bookstores, are a good resource.
The WellsTrade account provides access to over 2,000 no-load mutual funds from many well-known fund families, including more than 800 no-load funds that are available to all customers without transaction fees.
You could buy no-load funds from many different families through Schwab," says Chip Roame, managing principal of Tiburon Strategic Advisors, a Tiburon, California-based consulting firm specializing in the financial services industry, "even though you'd pay a discount brokerage commission.
No-load funds don't charge a commission when an investor buys or sells, but all funds charge annual fees to pay the people who run the fund.
The alleged deceptive course of conduct involved, but was not limited to, (a) false and misleading statements about the volatility of no-load funds, (b) the purpose and effect of a fifty (50) percent front load on the first twelve (12) installments under the Plan; (c) the charges associated with the periodic payments plans sold to the named plaintiffs and class members; (d) the representation that the financial planning document known as a Family Financial Plan (FFP) was an objective analysis of the clients needs and (e) the use of former officers as sales representatives.
We recommend no-load funds, which you can purchase directly from a mutual fund company.
Indeed, if one presumed benefit of distribution services is the selection of lower-cost index funds, one would expect no-load and load funds to have lower - not higher - operating expenses than true no-load funds.
We recommend purchasing no-load funds (see "The Right Fund at the Right Price," Moneywise, July 1999).
While Scottrade will begin charging a transaction fee on funds offered by these fund families, customers can continue to buy, sell and exchange more than 875 no-load funds online with no transaction fees.
100% no-load funds shares are purchased at net asset value directly from the sponsoring fund organizations without marketing and sales charges, deferred sales charges, fixed redemption fees or 12b-1 fees, all of which are deducted from load fund investments solely to support sales and marketing, Straus says.