No-load mutual fund


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Related to No-load mutual fund: 12B-1 fees

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 ?
Finally, declining back-end surrender charges are frequently imposed over a 7-year period, whereas no-load mutual funds carry no such levy.
Q I'm very interested in no-load mutual funds and how they work.
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.
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.
Hendricks, Patel, and Zeckhauser (1993) find that the relative performance of growth, no-load mutual funds persists in the short-term, with the strongest results for the one-year horizon.
Mellody Hobson is president of Ariel Investments, a Chicago-based money management firm that serves individual investors and 401(k) plans through its no-load mutual funds and manages separate accounts for institutional clients.
John Belluardo, president of Stewardship Financial Services, Tarrytown, N.Y., says, "I believe a diversified portfolio of no-load mutual funds that is rebalanced regularly is superior to any annuity strategy.
5, 1985, at 68; Deborah Rankin, Loading the No-Load Mutual Funds, N.Y.