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Load vs. No-Load Funds Many funds charge a commission to buyers. This is commonly referred to as a load. A fund may charge either a front-end load, a back-end load, or both. A front-end load is similar to the commission a broker charges for buying a stock and is a percentage fee that investors pay when buying shares. A back-end load is a fee the fund charges investors when redeeming shares. This is sometimes decreased or eliminated depending on how long the investor has held the shares for. This tactic encourages investors to hold shares for the long-term. So the big question is whether to buy a load fund or a no load fund. There is nothing inherently better about load funds. As a group, they don't offer investors a better rate of return or a higher yield. Investors generally want to minimize their expenses, since any expenses cut directly into returns. Given the variety of no-load funds available, in most cases it is advisable for an investor to select a no-load fund over a load fund. In certain situations where a comparable no-load fund doesn't exist, it may be advisable to purchase a load fund, but for the novice investor looking to get started in funds, the best place to start looking is in the no-load category.

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