Should you Choose 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.

You're probably assuming that a no load mutual fund is better because you don't pay any fees. It's easy to assume this, but you should first completely understand how it all works before you make that assumption.

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.

If you want to make a lot of money with investing, you need to get the highest return for your money that you can. Not only do you need the highest return possible, but you need to minimize your expenses which can easily be done by investing in no load funds.

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.

Let's say the load fund did get a higher return than the no load fund. After fees and commissions are paid, you could very likely end up with the same return or a lower return than the no load mutual fund.

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. - 23167

About the Author:

If you want to learn more about investing in no load mutual funds, find out where you can buy mutual funds.