No-Transaction-Fee Mutual Fund
What it is:
How it works/Example:
Let's assume you make a $10,000 year, the no-transaction-fee must generate a 10% return. However, if the had a 4% back-end load, the investor would have to pay a $400 fee upon the sale of the ($10,000 x .04), and the would have to generate a 14% return in one year to create the same $11,000 value.
When looking at trading information, the symbol "NL" indicates a fund is a no-load.
Why it matters:
Loads discourage investors from frequently trading their funds., an activity that requires mutual to have considerable amounts of on hand rather than invested. Generally, however, a load is considered payment for the 's expertise in selecting the right for the investor. Notably, there is considerable controversy about whether loaded perform better or worse than no-load