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 ?
For a directory of more than 200 no-load funds, send $5 to the 100% No-Load Mutual Fund Council, 1501 Broadway, Suite 1809, New York, NY 10036.
Although the attractiveness of no-load DRPs to smaller investors is easy to understand, firms' motivations for offering such plans are less clear.
Return distributions of the no-load fund group and the load fund group are compared against one another to determine which would be preferred (i.
It seems clear that no-load funds are a better option for investors who can do their own research.
A No-load mutual funds are available for purchase without an upfront sales charge, but there is usually a charge when you liquidate or cash in your shares.
For that reason, she added, ``It's going to have to be a heck of a strategy to do better than you're going to do by sticking your money into a couple of no-load mutual funds.
We recommend no-load funds, which you can purchase directly from a mutual fund company.
And while 78 percent of Americans can name a character on a television sitcom, only 12 percent know the difference between a load and a no-load mutual fund - even though, according to the Investment Company Institute, 37 percent of American households own mutual funds.