No Transaction Fee Mutual Fund

AAA

DEFINITION of 'No Transaction Fee Mutual Fund'

A mutual fund that is offered to investors by a brokerage firm without any form of commission charged for the transaction. This structure is advantageous to the investor because it allows him or her to purchase the mutual fund without incurring an up-front commission fee on the trade. For investors with a small amount of investment capital, this can be a significant advantage.

Also referred to as an "NTF mutual fund".

INVESTOPEDIA EXPLAINS 'No Transaction Fee Mutual Fund'

Brokers are usually able to offer NTF mutual funds to their clients because the mutual fund companies that run the funds step in and compensate the brokers for their forgone commission fees. The typical arrangement is that the mutual fund company pays the brokerage firm marketing fees when an investor buys into the fund through a broker, instead of buying directly from the fund.

VIDEO

RELATED TERMS
  1. Exchange-Traded Fund - ETF

    A security that tracks an index, a commodity or a basket of assets ...
  2. Commission

    A service charge assessed by a broker or investment advisor in ...
  3. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
  4. Tracker Fund

    An index fund that tracks a broad market index or a segment thereof. ...
  5. Trailer Fee

    A fee that a mutual fund manager pays to a salesperson who sells ...
  6. Load

    A sales charge or commission charged to an investor when buying ...
Related Articles
  1. How To Pick A Good Mutual Fund
    Mutual Funds & ETFs

    How To Pick A Good Mutual Fund

  2. How do you calculate the cost basis ...
    Options & Futures

    How do you calculate the cost basis ...

  3. Are mutual fund performance numbers ...
    Investing

    Are mutual fund performance numbers ...

  4. What is the minimum amount of money ...
    Retirement

    What is the minimum amount of money ...

Hot Definitions
  1. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  2. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  3. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  4. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  5. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  6. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
Trading Center