No Load Mutual Funds or Not?

By Corin D. V.

Are you interested in investing in mutual funds but can't figure out what a load or no load is? When a mutual fund charges fees such as a commission or set up fee, it is called a load mutual fund. No load funds do not charge any fees.

Just by looking at the definitions, you probably assumed that a no load fund is better. While I'm not telling you otherwise, you really need to understand the situation at hand to really get a grasp of it first.

When you invest in mutual funds, you are cutting out virtually all the time you would have otherwise needed to spend on research and the such. The fund manager does this for you and does it well with a properly diversified portfolio. Diversification is the key to reducing risk in your portfolio.

As with any kind of investment, you want to get the highest return possible. In order to do this, you need to maximize your direct return and minimize your expenses. Choosing no load funds will eliminate virtually all your expenses.

Load funds claim they can get you an above average return. They can't guarantee that. The stock market is unpredictable and you could likely get the same return with a load fund as you can a no load fund.

Even if they are able to get you a higher return on a load fund, after expenses and commission fees, you are very likely to be at the same return or less than the no load fund with out any fees.

When it comes time to choose between a load or no load fund, you'd probably be better off with a no load fund. You save money on fees and you can still shoot for a higher return by choosing a riskier and less conservative fund. You get a higher chance for a higher return without the fees. - 23223

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Choosing the best no load mutual funds isn't hard. Learn about the benefits of dividend mutual funds.