Load And No Load Mutual Funds Performance Comparison

In the race for the load and no load mutual funds performance, the investor is being offered a buffet that can only be compared to a five star restaurant selection. Never before have investment firms wooed the investor as they are doing now. If you are an experienced investor you already know the game. The market needs to have money infused in the system and this is a bargain sale on the top of the line products. If you are still a bit young in the investment game, you may need to try to figure out load and no load mutual funds performance comparisons.

The difference between load and no load mutual funds is: Load funds used to be the better investments with a commission or sales fee added to the price. While they were better investments, the cost was higher. No load fees used to be the lesser quality and didn’t have any commission fees associated with them. They might have been a bit riskier, but the cost was lower. The game has now changed. The selection of no load mutual funds has expanded into some of the best and brightest investment stars.

The current three types of mutual fund investments include: one hundred percent no load (no commissions at all). Mutual funds with either a five percent front end and or three percent back end load (redemption is usually in the third year). This can include what is referred to as no load, as the load is actually an annual management or distribution fee.

When configuring a return on investment, you need to pay careful attention to any load or management fee structures. Some no load mutual fund might look attractive, but are actually worth less in the long run than a load mutual fund.

A good rule of thumb is to get a cumulative three year comparison. It’s easy to do the math. List all three types of investments on a sheet of paper: On hundred percent no load, five percent front end load and three percent back end load. Write down your investment amount, i.e.: $5,000. Deduct the front end load amount from the initial investment on that level. Multiply each investment type by the interest percent (i.e.: 9 percent). Carry that math over a three year period. Remember to deduct the three percent back end load from year three of that level.

While this math exercise will blatantly show you that the one hundred percent no load gives you the best return on investment, you must now deduct any management or custodial fees. Also, the exercise was based on all levels receiving a nine percent interest rate. Many of the load investments are offered at a much higher interest rate. When you do the math on those, deducting the front end or back end fees, the load investment comes out as the winner.

The bottom line is: Know the investment firm you are working with. Configure the load and no load mutual funds performance factor based on interest and possible fees over a minimum of a three year period. You may also want to work with an investment counselor to assist in the best investment of your money.