No-load mutual funds are those that are bought without a sales fee or commission attached. All other things being equal, money invested in mutual funds will grow more quickly when the costs associated with the funds are kept low. And no-load mutual funds come without a major cost: a sales fee. This is one reason why no-load funds are so popular with investors. In 2009, $4.3 trillion was invested in long-term no-load mutual funds, according to the Investment Company Institute.
Do your homework. Many times, buying no-load mutual funds means going it alone. Research the different kind of no-load mutual funds available and evaluate them on the basis of such factors as rates of return, length of time they’ve been in existence and who manages the funds. Be sure to request the prospectus of any fund in which you are considering investing.
Consider investing in an index mutual fund, which is designed to earn a rate of return as close as possible to the return of the stock market as a whole. Because index funds don’t need to be actively managed with individual stock picks, their costs are low and many are offered as no-load funds. Index funds are perfect for the do-it-yourself investor.
Visit the websites of no-load mutual fund families, which will allow you to make your purchases directly from them. These sites will have most of the information that you need to research the funds. After you examine your options, making a purchase is as simple as selecting a fund, filling out paperwork and submitting it with the money you’re investing.
Look into discount brokerages, some of which will allow you to invest in no-load mutual funds through their site. This way, you can consolidate your investments in different companies’ funds under one brokerage account. Purchasing shares of funds in this way is similar to going directly to the mutual fund company’s site. However, some brokerages charge a fee, so make sure you research the costs involved.
Check your company’s retirement plan. Some company retirement plans, such as 401k plans, allow employees to invest in no-load mutual funds.
Consult with a fee-based financial planner who earns his income through something other than sales commissions. A planner who charges an hourly fee, for example, can advise you on your investments and assist you in purchasing no-load mutual funds.