BENEFITS OF LOAD AND NO-LOAD
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Load funds are usually sold through brokers or other
commissioned advisors. These advisors must evaluate their
customers' needs and make suitable recommendations. They do not
charge a separate fee for advice they give. They are compensated by
commissions from the mutual fund companies they represent. These
advisors also provide on-going advice and recommendations relating
to their customers' investments. Very often, they prevent their
customers from panicking when things look bad. They also advise
their customers of the optimum mix of investments that would best
meet their short-, intermediate-, and long-term goals.
A broker or advisor can help you to clarify your
objectives. He or she can help you figure out your risk tolerance.
An advisor can help you find funds with good performance histories.
Since advisors have more access to research than does the average
investor, some investors find their services worth the price. In
addition, load funds make up a large part of the mutual fund
family, and those who buy them can find some very good investment
The most obvious benefit of no-load funds is that
they leave you with more to invest. Investors who understand what
they want in a fund and who are willing to manage their investments
on their own frequently choose no-load funds. These investors must
do their own research and often subscribe to investment advisory
services and pay separate fees for advice.
However, there is no evidence that no-load funds
perform better or worse than load funds. It boils down to how you
get your advice: from a commissioned advisor, a fee-based advisory
service, or on your own.
In today's competitive arena, most fund families now
offer an advisor's class of shares with either no load or a low
load, for investors who would rather pay a fee than a commission
Now, some final words.