- A general bond no load fund can be an ideal investment for many individuals
- General bond funds may invest in a wide variety of bond types and maturities
- No load general bond funds do not charge any load fees or sales commissions
A general bond no load fund can be a good investment for many, because these funds invest in general bonds and do not charge load fees. General bond mutual funds invest their capital into general bond types. These investments can include a number of different types of bonds, such as government and municipal bonds, high yield bonds, international bonds, and many others. The risk levels for these funds will vary, depending on the specific fund that is invested in. Some of these funds have low risks involved but do not offer the highest possible returns, while other funds may offer great returns but have higher risks as well. General bond funds usually have a number of different bond investments, so that more than one type of bond is included. It is always advisable to do the research and make sure any general bond fund you choose to invest in meets your investment strategy and risk criteria. Doing the necessary research and homework before investing will prevent you from making bad investment choices.
No load funds do not have any load fees, which are basically sales commissions to a broker so that they determine the right funds for your investment capital. When you choose true no load funds to invest in you will determine which funds are the right ones for your investment goals. Determine whether you want a fund which includes general bonds that are high yield, conservative, or other bond types. A load fund can charge up to ten percent as a load fee, and this can include the fee being charged up front, at the back end, or both of these methods. Front end loads will take away from your initial investment capital, and over the lifetime of your investment this amount can add up to a substantial cost, because this is money going into the broker’s pocket instead of going to work for you from the very start.
Some general bond funds may state that they are no load funds when they may not really be true no load funds. One way that load fees can be hidden is when they are included in any 12b-1 marketing fees for the fund. When this happens the marketing fee percentage will be higher, and if it is above one fourth of one percent of the net assets of the fund then you will know that there are hidden load or sales commission fees involved. Examining the prospectus of any potential fund will help you determine whether the fund is a no load fund or an imposter. Load charges will significantly reduce the return on your investments, and this can be avoided as long as you are comfortable doing the research and comparing funds to determine which ones are right for you.
Putting your investment capital into a general bond fund can offer many advantages. Bond funds will normally give an income on a monthly basis, which is then reinvested. The bonds held by these funds are always being rotated, and the fund portfolio is actively managed by the fund manager. Bond funds do carry risks as well that you should be aware of though. One of these risks is that the borrower will default or their credit rating will decline, causing bond holders to take a loss on their investment. The other risk is that interest rates will go up, and this will cause the price of the bond to go down. Both of these risks can be managed well by the fund manager, to prevent them from occurring. No load general bond funds can be a good investment as long as you understand the risks and do the research needed to locate the right funds for you to invest in.
