Hello,

I decided to start this thread after participating in a rather unusual debate on another forum about no load mutual funds versus load mutual funds.

My view is that no load mutual funds are the logical choice for investors who have some investment experience and the time to do the mutual fund research necessary to make a thoughtful investment decision. No load mutual funds generally have lower expenses and overall costs compared to load mutual funds. As a result, on average and on a load-adjusted basis, no load funds should outperform load funds. I also believe that no load mutual funds have better investment management teams compared to load mutual funds. I recognize that the quality of management issue is very subjective.

Do you have an opinion on this issue?

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Michael A. Weiss, CFA
The Editor
The Mutual Fund Investor
http://www.mutualfundinvestor.net

You would expect no-load funds to have lower costs, since that is what a no load fund is...no cost. Since there are no costs, you pay the cost by accepting a lower rate of return. No one works for free, or manages for free either. The bottom line is the return, after considering all costs, whether they are high or low. If you have a no load fund earning 8%, but another fund earning 18% with a 4% cost...you see my point.

Yes, it is all about the fund managers, and the type of fund it is. There are bond funds...growth funds...emerging markets funds...ecology minded funds...oil exploration funds...and more. Some are very safe, while others are quite volatile. Just being a no load fund doesn't mean it will perform well.

You tend to get what you pay for.

No fund manager will work for free and no-load funds in most cases underperform when it comes to ROI.

I also disagree that no-load funds have better management teams in place then other funds.

Mutual fund managers, in my opinion, belong to the worst professional investors in todays market place.

Are they all bad?

Of course not, there are good mutual funds out there which you can find if you do your research and some of them may be a good choice for a long-term investment strategy especially for 'investors' who don't want to be involved with their investment (in my opinion that is not a smart move).

It all depends on the individual investor and the investment goals, risk tolerance and time horizon as well as the investors defintion of a successful investment strategy.

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It is not smart to play it safe but it is safe to play it smart.