Back End Load Mutual Funds
A back end load means you don't pay to get into the mutual fund; you pay to get out. In the long run, the back end load is the most expensive type of load available. It means that after all the many years of compounding and growth, that the company will get to take a percentage off the top at redemption. Some companies will charge up to 10%, but the average is in the 1-5% range.
The thing about back end loaded funds is that they are a highly priced item that has the primary goal of paying a highly priced financial executive. They are typically sold to unsophisticated investors of the low and middle class. Our opinion is that any loaded fund should be avoided. They are lots of funds out there without loads that get great returns. Don't fall for the line that the loaded fund has a better manager. It is simply not true. In most cases, you can buy the same fund from someone else without a load at all.
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