Taking the Load Off of "Must Have" Fully Loaded Funds

Taking The Load Off Of
Mutual fund investors should avoid unnecessary charges whenever possible. After all, the bottom line in any investment is how it performs for the investor, and that performance includes consideration of all loads, fees and expenses.

In most instances, the easiest approach is to simply focus on no-load and low-load mutual funds. For every high-performing load fund, there usually is a similar no-load or low-load fund that can be purchased more cheaply.

If you are investing larger amounts of money, however, load funds need not be written off entirely if there is one you find particularly appealing. Many mutual funds that are sold with sales charges (or "loads") offer discounts to investors who invest certain amounts. [These discounts are available only among funds that are sold with sales charges and do not apply to "no-load" funds, which are sold without sales charges.]

The amount of the discount varies, depending upon the amount of the investment. The investment amounts at which investors qualify for the discounts are called breakpoints. The higher the level of your investment, the more likely you are to qualify for a breakpoint discount. Table 1 presents a typical breakpoint schedule.

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