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A no-load fund is a mutual fund that does not impose a sales charge (or "load") when you buy or sell shares of that fund—but which typically has other costs, including shareholder fees and annual operating expenses.
Why does this matter?
Because no-load doesn't mean no-cost. No-load funds can charge purchase fees, redemption fees, exchange fees and account fees—which you pay directly out of your pocket. They can also have annual management fees, 12b-1 fees (which cover distribution or shareholder service costs) and other operating expenses—which are paid out of fund assets. While no-load mutual funds may cost less than mutual funds with loads, you won't receive the assistance of a broker or investment professional—unless you pay separately for that advice.
Here's the key message.
Fees matter—and every mutual fund has them. Whether you're shopping for a no-load or a load fund, FINRA's Mutual Fund Expense Analyzer is a good resource that shows you the impact fees have on your investment over time—and allows you to compare the expenses of different funds with different cost structures.
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