Mutual funds that do not have sales charges are no load mutual funds. No load mutual funds charge no (or a very low) sales fee or commission. The shares are distributed directly by the investment company, instead of going through a secondary party.
For example, when investing $50,000 in a no load fund, the entire investment goes toward buying shares in the fund.
Financial companies typically sell no load mutual funds directly to investors in places like newspapers and magazines.No load funds are either marketed directly by the mutual fund companies or offered through discount houses like Schwab, Fidelity, and many others.
Watch out, because some companies, such as banks and broker-dealers, may charge their own fees for the sale and redemption of third-party mutual funds. No load funds may have a small 12b-1 fee, also known as the cost of distribution, which is incorporated into the fund's expense ratio.
Long term, no load mutual funds may be better investments because the fees won't eat away at the overall net return. However, research does suggest that no load funds that carry above average rankings from Morningstar will most likely outperform load funds, provided that the funds are in the identical fund category (i.e.; large growth, large value, mid blend, small growth, etc.) with a time frame of at least three years
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