Close this search box.

Table of Contents

No-Load Fund


A No-Load Fund is a type of investment fund that does not charge a sales commission or load upon the purchase or sale of its shares. This means investors pay for the actual value of the securities, without additional fees. Essentially, all of the money invested will be used to buy the fund’s assets.


The phonetic pronunciation of the keyword “No-Load Fund” is: “noh-lohd fuhnd”.

Key Takeaways

<ul><li>No-Load Fund is a mutual fund where shares are sold without a commission or sales charge. The reason for this is that the shares are distributed directly by the investment company, instead of going through a secondary party.</li><li>This direct process helps the investors to save money in the form of commission. It allows them to put the entire amount of their investment into the mutual fund, unlike other regular funds where part of the investment is taken as commission or load charge.</li><li>Although no-load funds do not charge a sales commission, they still carry other fees. These can include management fees and various operating expenses. Therefore, investors should consider the total cost of owning such funds, not just the absence of a sales charge.</li></ul>


A no-load fund is important in the world of business and finance primarily because it allows investors to allocate their capital more efficiently. A no-load fund is a type of investment fund which doesn’t charge any commission or sales charge when an investor buys or sells its shares. This feature is attractive for investors as more of their money goes directly into the investment, rather than getting eroded by upfront or backend fees. As a result, investors have a greater potential to generate higher returns. This cost-effectiveness is particularly beneficial for long-term investors who prioritize low costs to maximize their investment growth. Therefore, understanding and utilizing no-load funds can be a significant strategy for managing investment expenses and enhancing returns.


A No-load Fund provides a valuable investment vehicle for individuals seeking to optimize their earnings by minimizing fees. They serve the purpose of giving you the opportunity to invest directly into the fund company, without paying any sales charge or commission fee. Such funds benefit the investor by allowing them to dedicate more of their capital to the actual investment, rather than spending a portion on upfront costs, which, over time, can make a significant difference in the value of their investment. These funds decipher a cost-efficient approach to maintaining an investment position for individual investors, particularly those with limited capital to invest or those who are cost-conscious.In terms of usage, a No-Load Fund is typically used by long-term investors due to its cost-efficiency over a prolonged period of time. It’s utilized in various ways, depending on an individual’s financial objectives. This can be for retirement savings, wealth accumulation, or even for creating an education fund. Additionally, they are commonly used in employer-sponsored retirement plans, as they allow employees to contribute a greater portion of their earnings towards their retirement savings. This type of fund is a flexible, accessible, and transparent method of investment, making it a popular choice among a variety of investors.


1. Vanguard 500 Index Fund (VFIAX): This large-cap, no-load fund is popular among investors for its low expense ratio and its broad index coverage. By investing in this fund, you gain exposure to 500 of the largest U.S. companies, which represent about 75% of the U.S. stock market’s value.2. Fidelity Contrafund (FCNTX): This is a no-load, growth mutual fund managed by Fidelity Investments. It focuses on generating capital gains rather than income. Investors are not required to pay sales charges or commission fees upon buying or selling.3. T. Rowe Price Equity Income Fund (PRFDX): This is another example of a no-load fund. Managed by T. Rowe Price, the fund focuses on large-cap value stocks that are believed to be undervalued. It aims to provide a decent amount of current income and long-term capital growth. Because it is a no-load fund, investors can buy or sell shares without any commission or sales charge.

Frequently Asked Questions(FAQ)

What is a No-Load Fund?

A No-Load Fund is a mutual or investment fund that does not charge a commission or sales charge upon buying or selling its shares. The fund shares can be purchased directly from the investment company.

How does a No-Load Fund differ from a Load Fund?

The primary difference between the two is the fee structure. Load funds charge fees upon buying or selling shares, while No-Load Funds do not have these charges.

What are the benefits of investing in a No-Load Fund?

The main benefit of investing in a No-Load Fund is lower investment costs. Because there are no commissions or sales charges, all of your money goes directly into the investment.

Do No-Load Funds cost nothing?

While No-Load Funds do not require A sales charge or commission, they may still impose other fees such as administrative costs, management fees, and other operating expenses.

How can I buy shares in a No-Load Fund?

Shares of a No-Load Fund can generally be purchased directly from the investment company or through a broker. However, brokers may charge their own fees.

Are No-Load Funds always a better option than Load Funds?

Not necessarily. The lack of a sales charge in No-Load Funds can be advantageous, but it’s also important to consider other factors like the fund’s performance history, management, and other costs.

Where can I find information about a No-Load Fund’s expenses?

The information about a fund’s expenses, including management fees and other costs, should be outlined in the fund’s prospectus which is usually available on the fund’s website or from the fund company directly.

Related Finance Terms

  • Mutual Fund: A type of investment vehicle consisting of a portfolio of stocks, bonds, or other securities, which is managed by an investment company.
  • Expense Ratio: The measure of what it costs an investment company to operate a mutual fund, encompassing all annual fund operating costs, expressed as a percentage of the fund’s average net assets.
  • Front-End Load: Fees paid to brokers by mutual fund companies for selling the fund and bringing in new investors.
  • Back-End Load: A fee investors pay when selling mutual fund shares, and it is a percentage of the value of the share being sold.
  • Net Asset Value (NAV): The net value of an entity and calculated as total assets minus intangible assets (patents, goodwill) and liabilities.

Sources for More Information

About Our Editorial Process

At Due, we are dedicated to providing simple money and retirement advice that can make a big impact in your life. Our team closely follows market shifts and deeply understands how to build REAL wealth. All of our articles undergo thorough editing and review by financial experts, ensuring you get reliable and credible money advice.

We partner with leading publications, such as Nasdaq, The Globe and Mail, Entrepreneur, and more, to provide insights on retirement, current markets, and more.

We also host a financial glossary of over 7000 money/investing terms to help you learn more about how to take control of your finances.

View our editorial process

About Our Journalists

Our journalists are not just trusted, certified financial advisers. They are experienced and leading influencers in the financial realm, trusted by millions to provide advice about money. We handpick the best of the best, so you get advice from real experts. Our goal is to educate and inform, NOT to be a ‘stock-picker’ or ‘market-caller.’ 

Why listen to what we have to say?

While Due does not know how to predict the market in the short-term, our team of experts DOES know how you can make smart financial decisions to plan for retirement in the long-term.

View our expert review board

About Due

Due makes it easier to retire on your terms. We give you a realistic view on exactly where you’re at financially so when you retire you know how much money you’ll get each month. Get started today.

Due Fact-Checking Standards and Processes

To ensure we’re putting out the highest content standards, we sought out the help of certified financial experts and accredited individuals to verify our advice. We also rely on them for the most up to date information and data to make sure our in-depth research has the facts right, for today… Not yesterday. Our financial expert review board allows our readers to not only trust the information they are reading but to act on it as well. Most of our authors are CFP (Certified Financial Planners) or CRPC (Chartered Retirement Planning Counselor) certified and all have college degrees. Learn more about annuities, retirement advice and take the correct steps towards financial freedom and knowing exactly where you stand today. Learn everything about our top-notch financial expert reviews below… Learn More