From: utzoo!decvax!cca!charlie
Newsgroups: net.invest
Title: Re: No-load mutual funds
Article-I.D.: cca.4426
Posted: Wed Mar  9 09:51:46 1983
Received: Thu Mar 10 01:29:27 1983
References: hpda.360

The question was: why would anyone in their right mind buy a load-type
mutual fund when no-loads are "just as good".

There are two reasons.  The first you can hear from any salesman;  the
best performing funds are load funds.  In any given year, this may or may
not be true.  Given that the vast majority of funds are load, it would
not be surprising if this were true (the worst performing funds would
also be load) just by chance.  I have never seen any evidence that there
is a statistically significant difference between loads and no-loads in
aggregate.

The second is the real reason.  It is the same reason some people buy
cameras at the local camera shop instead of mail order from New York.
What that 8 percent commission pays for is for the salesman to discuss
your needs and help you decide what you want.  There is certainly a
conflict of interest on his part and he will not understand your
financial situation as well as you do, but for many people the help is
worth the price.  If you are sophisticated enough to know the difference
between a load and a no-load (don't laugh), the loads probably aren't
for you. 
 
     -- Charlie Kaufman