The percentage we pay for the mutual fund, doesn't it go to mutual fund managers? If they don't make any money out of our investment, would they take good care of our funds? I heard that loaded fund is more secure than no loaded fund. Is that true?
Thanks!
2007-01-19 08:04:28 · 8 answers · asked by Princess 5 in Business & Finance ➔ Investing
not true....loads are sales charges and have nothing to do with security. Only way a loaded fund would be better than if the SAME fund was no load would be if the expense ratio was substantially lower. A front end load gets your sales charge up front...a back end load gets it in the back. back end loads typically decrease as time passes because they've had time to earn a profit on your money while it's been invested.
More important than the load is the expense ratio...a good low expense ratio is good regardless of whether there is a load.
And, more important than an expense ratio is returns. A fund that historically has performed 2% higher than another fund is better choice if it's expense ratios are 1% higher even if there's a front end load.
2007-01-19 09:19:39 · answer #1 · answered by digdowndeepnseattle 6 · 0⤊ 1⤋
The "load" refers to the investment fees that the investment manager collects (often out of the first dollar) from the individiual investment.
"No load" means the the investment manager gets a fee for running the fund, but that is normally taken out of the return and spread over everyone in the fund.
There is a never-ending argument which is best. I prefer no load funds, but other can point to some load funds that pay more. With all the data available, it is easy to compare the two and to select the overall best investment.
2007-01-19 08:10:07 · answer #2 · answered by united9198 7 · 1⤊ 1⤋
NOPE!! Both types of mutual funds are equally secure and potentially profitable.
The KEY difference between them is that a no-load fund means you don't have to pay any sales commission on the shares you buy and/or sell.
No load funds are bought directly from the Fund itself. For example, shares in the no-load Value Line Fund can be bought and sold directly through Value Line.
And FYI, there are two types of load funds, a front-end and a back-end load fund. The difference between these is whether you pay commission when you initially buy the shares or when you sell them.
2007-01-19 10:25:53 · answer #3 · answered by msoexpert 6 · 1⤊ 1⤋
yes the percentage goes to the manager. no loaded funds are better. learn something about investing for yourself so you can at least know if other people are taking care of your money the way you would. more secure? well with a no load, you at least are investing the money you put in. with a load, if you invest 1,000 and 5% goes to the manager, then you really only have 950$ invested.
2007-01-19 08:14:15 · answer #4 · answered by Debt Free! 5 · 0⤊ 1⤋
No-load funds are indeed more secure. Loaded funds usually have a substance abuse problem and are much more susceptible to serious life problems. No-loads, could of course, just be behaving until the pressure is off and then right back to their old ways. Be careful.
2007-01-19 08:29:50 · answer #5 · answered by husemanw 1 · 0⤊ 1⤋
Ridiculous. Absolutely untrue. Only fools pay loads on mutual funds. They have other sources of revenue from inside the fund. No extra security at all - a lie.
2007-01-19 08:08:26 · answer #6 · answered by vegas_iwish 5 · 3⤊ 1⤋
No, a loaded fund just makes it harder for you to make a profit.
2007-01-19 08:20:46 · answer #7 · answered by Feeling Mutual 7 · 2⤊ 0⤋
Who told you that, a stock broker? LOL
2007-01-19 14:44:32 · answer #8 · answered by escapegrl1 3 · 0⤊ 1⤋