Choosing No Load Mutual Funds

By Corin D. V.

There are basically two main types of mutual funds: no load mutual funds and load mutual funds. While a load fund charges fees such as set up fees or commission fees, a no load mutual fund does 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.

Mutual funds are an excellent way to reduce risk while decreasing the amount of time you need to put into the investment. Someone else is doing all the work for you but you still get excellent diversification. You can just sit back and make more money while someone else does all the choosing.

To be a successful investor, you have to try to get the most money possible for your investment. You need to get the highest direct return possible while spending the least amount of expense as possible. You get rid of the expense with a no load fund.

While load mutual funds claim they can get you an above average return, they can't guarantee it year in and year out. The stock market is a game of chance and is unpredictable. You could get the same return with a load fund or less than a no load fund.

Sometimes, maybe even most of the time, the load fund can get you a higher return, but after you subtract the fee, it might be the same or less than the no load fund that doesn't charge fees.

Should you choose a no load or load fund? You would probably do better with a no load fund. By not paying any fees, you can make a lot more. If you want to increase the chance of making a higher return with a no load fund, choose a higher risk and less conservative fund. - 23217

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Want to learn more about investing in no load mutual funds? Learn how to choose mutual funds with no load.