A load fund is a mutual fund that charges the investor a percentage of the NAV on entry or exit. This
charge is decided by the mutual fund provider. The amount is used by the provider for advertising and
distribution purposes and is included in the purchase as a sales fee.
Additionally, load funds may be differentiated into back-end and front-end funds depending on when
the fee is charged. For a back-end fund, the fee is charged when the mutual fund is redeemed and the
front load is charged on purchase of the fund.
A no-load fund is simply a fund that does not charge any commission or sales charge. This is possible
because shares of such funds are distributed directly by the investment company.
In the long run, load as well as no-load funds offer similar returns. However, no-load funds do charge a
fee if they are redeemed before their maturity.
