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 do it yourself, if you have the time and inclination, by choosing no-load mutual funds and perhaps paying discount brokerage commissions for selected securities transactions.
For the firm's family of no-load mutual funds, Ultimus will provide a range of services including fund accounting, financial administration, legal/compliance, distribution and transfer agency.
Ariel Investments' no-load mutual funds and separate accounts have assets of nearly $12 billion.
"So, for instance, if a sponsor limits participants to using only no-load mutual funds in the brokerage window, the sponsor should look at every transaction to make sure there were no violations of that policy," he says.
Headquartered in Chicago with offices in New York and Sydney, Ariel manages six no-load mutual funds. Additionally, Ariel manages separate accounts for corporate, public, union, and non-profit organizations.
Mellody Hobson is president of Ariel Investments L.L.C., a Chicago-based money management firm that serves individual investors and retirement plans through its no-load mutual funds. For more valuable financial tips, visit ArielInvestments.com or follow @ArielFunds on Twitter.
Every news person and no-load fund purveyor says folks are better off investing in no-load mutual funds, and things are better still if the investing is done in an index.
All additions are no-load mutual funds, says Ann Hughes, vice president, head of business and sales development, for Sammons Retirement Solutions.
"We run four '40 Act no-load mutual funds and a long/short partnership here," he explained when asked about the firm's philosophy and process.
The company, headquartered in San Antonio, Texas, manages 13 no-load mutual funds in the U.S.
Ariel Investments, LLC launched two all-cap no-load mutual funds (http://www.plansponsor.com/Ariel_Investments_Launches_Two_Mutual_Funds.aspx).
In my humble opinion, it is preferable to the typical stockbroker arrangement, a CPA with a PFP designation, or a fee-only RIA who places clients in no-load mutual funds. None of these is active investment management under the model I'm advocating.