What's the difference between a load and no-load mutual fund?

Investing, Mutual Funds
Sort By:
Most Helpful
July 2016
95% of people found this answer helpful

A load is a commission charged on the purchase and in some cases the sale of a mutual fund. There are different types of mutual funds with loads including ones that charge a sales load or commission upon purchase as well as funds that charge loads if sold within a specific number of years after purchase. Funds that charge a load upon purchase are known as front loaded and funds that charge a load upon sale are known as back end loaded. One tip off is that a mutual fund is a loaded fund if there is the word "Class" in the fund's description such as Class A or Class B shares. 

Before buying a loaded mutual fund, you may get better results with lower cost by asking the broker if the load can be waived. In addition, finding a similar mutual fund in terms of risk, strategy and objectives with lower internal fees and no sales loads may be more beneficial long-term. Funds without loads are known as no load mutual funds.

Another site to visit is the National Association of Personal Financial Advisors (NAPFA.org) regarding the question on loads and other related cost. NAPFA's site has helpful information on how advisors charge for their services as well as a directory of advisors who are fee-only and therefore do not sell loaded mutual funds for commissions.

July 2016
February 2005
July 2016
July 2016