Sunday, December 26, 2010

No-load Fund

A No-load Fund is a mutual fund with no sales commission, technically the fund should also have a 12b-1 fee of 0.25 percent or less per annum. These funds exist as a way of mutual fund providers attempting to appeal to investors' sense of thrift, i.e. to avoid paying up-front sales charges, thereby hoping to attract a higher FUM base. As with all fees, investors should be aware of all of the fees - direct and indirect - that they are paying and weigh these against the benefits of the fund and associated services. Sometimes financial planners will effectively engineer a no-load fund by refunding the commission they receive from the upfront sales charge to the client.

Synonyms: No-load mutual fund, Zero-commission fund

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