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Finance Glossary

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Over 700 finance terms, Shmooped to perfection.

No-Load Fund


One of the great financial marketing phrases of all time, "no load" refers to commissions paid when investors buy mutual funds (and index funds and other funds but when this term was coined mutual funds ruled the Earth like dinosaurs 80 million years ago). Ever hear of a free lunch? Ain't none. Same deal with this concept. Instead of paying a 2-5% commission up front and then having an investment management company manage the money for 0.8% a year in management fees, no load funds charged 0% commission up front but then investors paid 2% per year in management fees. So if they held their funds more than a few years, they screwed themselves by not reading the fine print. No load funds are fine if investors are trading mutual funds like stocks but most investors have better things to do with their time like put braces on kids' teeth and sink 12 footers to win the U.S. Open.