If you're a do-it-yourself investor, no-load mutual funds can be a big part of your investment strategy. Mutual funds allow you to both pick from a wide range of stock and bond categories -- and at the same time get a diversified investment within a category. A no-load mutual fund is one in which shares are sold without a commission or sales charge, meaning that 100 percent of your investment goes to work making money. The status of a particular fund -- load or no-load -- is published in numerous locations.
If you want to know whether or not a specific mutual fund is of the load or no-load persuasion, you can quickly find information online about the fund's fees and expenses. Every mutual fund has its own set of webpages that cover information about the fund including investment objectives, performance history and the fund's fee structure. If no sales charge is listed -- front-end or deferred -- a fund is no-load. As an alternate source, the major financial websites, such as Yahoo Finance, Bloomberg and MarketWatch, provide load information on each site's fund profile pages.
Mutual Fund Screeners
If you're looking for no-load funds in which to invest, consider using a mutual fund screener. An online fund screener will let you generate a list of mutual funds meeting a set of criteria -- including no-load status -- which you set yourself. Again, the major financial websites are the place to find a mutual fund screening tool. Another possibility is your online brokerage account if you have one. Online brokers often offer discounts, allowing investors to buy no-load funds without fees or commissions; your account will let you call up a list of the no-load funds your broker offers.
Mutual Fund Families
A specific mutual fund is often just one of many in a "family" of mutual funds. A fund family is a group of mutual funds that can range from just a few to numerous mutual funds that one investment or fund company offers. There are mutual fund families that only offer load funds, other families that are strictly no-load, and some families that walk on both sides of the sales-charge road. To avoid finding a fund you like and later discovering that it's a load fund, you could limit your research to funds only from no-load families.
Fund Share Prices
Although you don't see it much any more, back when you found fund share prices in the newspaper, you could tell if a fund was no-load by the share price listings. The value of a mutual fund share is called the net asset value, or NAV. For a load fund, the load is added to the NAV producing the public offer price, or POP. If the NAV of a fund is the same as the POP, the fund is probably no-load. A back-end loaded fund will have a notation next to the fund name or price, indicating that there is a redemption fee if you sell the fund within a specified number of years.
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