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 ?
Both the RIA and IBD channels have also experienced an increase use of institutionally priced share classes and no-load funds, as the overall price of products becomes more of an issue for fee based advisors.
He likes this trio because they are no-load funds with very low expense ratios, solid histories, and solid management investment styles.
120) The spread load-selling tool presented the fund industry's load fund segment with a handy device to counter downward pressure on prices caused by competition from no-load funds.
There are also no-load funds that do not have an upfront sales charge.
Some no-load funds also have two classes, a retail share class and a class sold to institutional investors that has lower expenses and higher minimum investment levels.
I can remember being with PaineWebber in the '80s, and we saw the proliferation of no-load funds.
Fund firms in Britain are more likely to charge initial load fees than their counterparts in the United States, although these fees are increasingly under competitive pressures as new entrants try to win market share by offering no-load funds.
During the crash, no-load funds were, in fact, subject to greater levels of redemptions than load funds.
In the latest of a series of such alliances, KeyCorp has begun offering its customers more than 650 no-load funds from Schwab's wildly popular OneSource fund supermarket.
1962), also have considered the differences in mutual fund returns for load contrasted with no-load funds.
Investors who have the time and expertise to make their own investment choices typically favor no-load funds.