Darin Pastor is a successful business executive currently leading Capstone Affluent Strategies, a private wealth management firm based in California. Darin Pastor started his career in the financial industry managing and selling mortgages, insurance, and mutual funds before he became a top financial advisor and investment manager at Wachovia Bank and JPMorgan Chase.
A mutual fund is a portfolio of stocks or bonds or a combination of both that gives financial benefits to investors including diversification, accessibility, and stability. Investors can maximize the return of investments in mutual funds by having a clear understanding of the difference between load funds and no-load funds.
Load funds are mutual funds that charge a fee. That fee is paid to an advisor or a broker for doing all the research and mutual fund transactions on behalf of the client. The total charge is a combination of a percentage of the amount invested and a sales fee that can be taken up front or at the time the mutual fund shares are redeemed.
Unlike load funds, no-load funds don’t charge a fee or commission for the shares purchased or sold. They therefore minimize expenses and maximize profits over the long term. Because there are usually no third-party advisors or brokers involved, the investors themselves typically have to conduct their own research, monitor the market, and do the actual trading.
In general, investors who can make strategic purchasing and selling decisions do not benefit from investing in load funds.