No-Load fund is a fund that does not have a load fee which is paid by investor that acquires the mutual fund. There are two types of load fees: front-end load and back-end load, and ‘no-load fund’ should not contain any of these charges.
There are very serious reasons why to choose the no-load funds. Load fees are direct expenses of the investor and lower his investments’ value. Higher load fees create negative impact on investment portfolio of the investor.
Funds without load fees are gaining their popularity quickly, and it is just a question of time when investors will not even consider paying load charges at all. Those, who are saying that load funds perform better and are worth to choose, probably are just trying to sell some fund to you and get their commission. However, if you pay a load fee, it directly reduces your portfolio’s value, and there is no way for this fee to be an advantage.
The future belongs to no-load funds, although which might include some wise ‘back-end load’ schemes that would protect long term investors from short term speculators.
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