Should you Choose No Load Mutual Funds?

By Corin D. V.

What is a no load mutual fund? As opposed to a load fund, a no load mutual fund does not charge any fees. Load funds may charge any kind of fee whether it's a set up fee or a commission percentage of what you earn.

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 a huge time saver and they allow you to invest in stocks even if you aren't a professional stock broker. You get a very well diversified portfolio from a professional mutual funds manager. You need to diversify if you want to reduce the risk of your portfolio.

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.

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.

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.

When it comes time to choose between a load or no load fund, you'd probably be better off with a no load fund. You save money on fees and you can still shoot for a higher return by choosing a riskier and less conservative fund. You get a higher chance for a higher return without the fees. - 23159

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