How to Buy the Best No Load Mutual Funds?

Any mutual fund worth its salt incurs some amount of expense and they load it on the sale. However the no load funds do recover their expenses on back end loads or exit loads rather than up front where you get disadvantaged clearly. A comparison of no load mutual funds versus loaded mutual funds shows some small but top no load mutual funds even further simplify matters by reduced lowest minimums of $500 and $ 250 plus 12b-1 fees alone.

Here are a few points you need to remember when you are out buying a mutual fund with no load:

• First of all check for the tags such as class A, class B or class C in their brochures. These classes refer to the type of the loads that are chargeable on you at various points. For example class A load is levied up on you at the entry in to the mutual funds and class C is a continuous load and so on.
• A good mutual fund family declares all fees and loads that may be applicable to the fund and it is this that you need to look for carefully. Look for anything that refers to as fees and whether they say none or zero against their names. These are generally:
  • Front End Load
  • Front End Sales Charge
  • 12b-1 Fees
  • Deferred Load
  • Actual Fees
  Anything other than zero written here indicates you are looking at the brochure of a loaded mutual fund.
• Your effort to find a best no load mutual funds also includes being careful with sales people who are smart enough to guide you in the direction that benefits them most. Suggestions such as holding a loaded fund for say 5 years will exempt or refund you the sales load are untrue. Avoid similar sales talks like load funds have better money managers or load funds making up for their fees by outperforming any other instrument of investment. Simple logic to remember is if load funds can do better why not no load funds.

Ultimately some of the top no load funds perform equally well as a load fund. But do not let locating a best no load mutual fund frustrate you. After all the best experienced advisers and managers can only guide you through the available funds but the onus of deciding on a suitable fund lies on you.

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