Mutual funds that do not charge a front-end or back-end sales load are known as no-load funds.
While no-load mutual funds do not require the investor to pay sales charges (i.e., commissions) when buying or selling that fund, it’s important to remember that nothing is free, especially in the world of financial services. The portfolio manager of the fund and his team of analysts still have their salaries, bonuses, retirement benefits, and so on, and fees are needed to pay for it.
There are also expenses associated with marketing the fund and distributing the shares. An investor may choose a no-load fund in an effort to avoid paying a front-end load and seeing their initial investment decrease before anything else happens, but the fees on a no-load fund have the potential to be higher than the A share fees.
The only thing a no-load fund can’t do is pay a broker or advisor commissions, in a nutshell. Any other fees they feel the need to charge year-to-year to keep the fund running can be worked into an array of fee and expense line-items.
These mainly fall under the umbrella of 12b-1 fees, but there are plenty of others to choose from. Investors should be aware that it is possible for a no-load fund to cost them more, and impair their potential rate of return, compared to a load fund.
There are plenty of cost-efficient and well-managed funds in both categories, so an investor shouldn’t rule one or the other out based on this criteria alone. Also, remember that front-loaded funds may offer breakpoints for larger investment amounts, which can reduce the fees charged significantly.
How do Advisors Charge and How Much Should I Pay?
What are the Expenses Associated with Buying and Owning Mutual Funds?
Ratio call spreads are options strategies where the investor combines purchased calls and short calls at the same expiration
The answer is simple and needs only common sense to understand: you should begin saving as soon as you can!
Lifestyle inflation is the tendency of people to increase their spending and standard of living along with any $ raises
The DAO was somewhat of an experiment in corporate governance and structure built on the open-source Ethereum platform
Home equity loans give a homeowner the ability to borrow a lump sum against their home equity. Homeowners have the...
Chartists are theorists who attempt to find parameters and algorithms that can offer efficient trading signals and profits
Consolidated financial statements are required when one company owns a controlling interest in another company
An uptrend is a continuous upward movement in a stock's price. A security purchased at the beginning of an uptrend...
Securities in the market can be analyzed on technical levels or fundamental ones, and it is generally best to take both
A put option gives the owner of the option/contract the right to sell a stock at the strike price named in the contract