- Basic materials no load funds have investments in raw materials that will be used for manufacturing and processing.
- No load bond funds and no load index funds do not charge high load fees.
- The best no load funds can be passively or actively managed, and each management style has rewards and drawbacks.
Basic materials funds, including no load bond funds, can cover a wide variety of materials. Basic materials are materials used to produce or process finished goods. These funds invest in companies which discover, develop, and process raw materials, and these materials can include a wide range. These materials can be used in chemical manufacturing, metal mining, plastic and rubber chemicals, forestry and products from wood, gold, silver, iron, steel, paper and related products, and others. Construction materials are also considered basic materials. Basic materials investments can include no load index funds, no load bond funds, and other investment types. These funds may be very volatile and risky, and are usually dependent on the supply and demand of the materials. If demand is low then so are prices and returns, but if demand skyrockets, like gold has in the last few years, then the value of these investments will also rise. The sector that deals with basic materials is also very sensitive to business cycle changes. To find the best possible basic materials no load bond funds, no load index funds, and other no load funds, start a list. Do the research concerning this sector, and make a list of no load funds that may be right. This gives a starting point, so that in depth evaluation and analysis of each fund can be done.
Once there is a list of no load funds in the basic materials sector, each aspect and factor of a fund must be compared. Look at the value of the net assets, the family of funds that offers it, who the manager is and how long that position has been held, and the yield and year to date return. Look at the holdings of each fund, to determine how diverse the fund portfolio is and what risks there are with that specific fund. Look at the rating the fund has received, and who the rating company is. The most well known and trusted is Morningstar, which has a star rating that goes from zero to five. Five stars means a fund is one of the best basic materials funds available.
No load index funds that involve basic materials follow a specific index, and the fund portfolio is arranged to meet the performance of that index. These funds, unlike most mutual funds, are passively managed instead of being actively managed. This means that investments are made for long term results, and the portfolio turnover rate is much lower than funds which are actively managed. Mutual funds, including those that involve basic materials, offer many benefits. Many mutual funds have holdings that are diverse, but sector funds may not have this advantage so make sure to check the funds carefully. No load funds do not have high load fees, which are usually around five percent or more. These fees can be charged in the beginning, known as front load fees, when the fund shares are sold, called a back end load fee, or they can be assessed continuously, sometimes called an even load. A load fund can involve one or all of these load fee types, and the amount charged by these mutual funds can take a significant amount from the investments. No load basic materials funds, whether they are no load bond funds, no load index funds, no load stock funds, or another type, can be a very smart investment which offers many benefits, but there are also risks involved with every investment. A complete analysis of each fund is needed to make sure the funds chosen fit with the investment goals, strategies, and allowable risks of each specific investor.
