- No load funds have fewer deductions that reduce your investment assets and value
- Load mutual funds may reduce the value of your assets due to load fees add higher mutual fund expenses
- A redemption charge may or may not be a good thing, but this charge is invested back into the fund
If you are comparing mutual funds to determine which fund is the best choice for your investing capital and goals, understanding whether no load funds or load funds will secure your assets better is an important aspect of the comparison. Investments are made to secure assets and to increase the value of your investment capital, so it is important that you choose funds which keep your assets safe and does not charge unnecessary fees that will reduce the value of your investment capital. There is a difference in the way that these two fund types work, and the fees involved, and load mutual funds are not the best way to secure your assets. Some funds may charge a load charge, and higher mutual fund expenses, and these charges diminish your investment capital and the value of your assets.
No load funds never charge any load fees, and any 12b-1 marketing fees are much lower than those which load mutual funds charge. Many times funds which have a load will have higher 12b-1 fees as well, and some of this fee may include amounts used as sales incentives and broker commissions. Funds which are actually no load do not charge a 12b-1 fee which is more than one fourth of one percent of the total net assets of the fund. Mutual funds which carry loads may have a fee percentage for this that can be one percent, and this is s substantial difference. These expenses are charged to every investor, and larger expenses will cost you more for the investment, and reduce the value of your investment assets.
If you want to secure your assets, choose mutual funds which have low risk and volatility levels, no load fees, and low mutual fund expenses. This will help you keep your assets more secure, and keep your fund expenses down to a minimum. Load mutual funds do not meet this criteria, because they involve unnecessary expenses and commissions which will lower your investment amount and assets. Load mutual funds will cost more in expenses and commissions, and this will cause your assets to decrease because larger amounts are deducted to cover these costs.
A redemption charge is not the same thing as a load fee, and some funds which have one are not bad investments. The redemption charge is a fee that is charged if you redeem your shares in the fund, but these costs are returned to the fund and cover the costs associated with the shares being redeemed. Some investors hold only for a short time, and then redeem their shares for a profit. These transaction costs can really add up, and the fund investors who do may get stuck with these costs if there is no fee for fund redemption. If you want to make sure that you do not get stuck paying for the frequent transaction costs of investors who are looking for short term profits by frequently buying and redeeming shares in funds, look at whether the fund charges a fee for redemption so that these costs do not reduce your assets in the fund.
Comparing load mutual funds and no load funds to find out which mutual fund type will help keep your assets secure will show that no load funds offer better asset protection. They offer lower mutual fund expenses so that the value of your investment and assets are reduced less to pay these expenses. Look at all of the expenses involved with a fund to find the best investment options for your unique goals and circumstances, not just whether the fund has load fees or not. This will help you protect your assets and avoid high risks and large financial losses, as well as large expenses and other deductions which lower your investment value.
