This makes these funds a poor choice if you're investing for the short-term. Some fund companies dock your dividend, interest and capital gains should you decide to reinvest them. Some funds deduct the costs associated with advertising and marketing themselves from the fund's overall assets. The charge associated with such deductions is called a 12b-1 fee, and ranges as high as 1.25 percent. Some funds feed a portion of the fee to the broker who sold you the fund.
Load funds recognize that by touting themselves as advice givers who can educate novice investors.
There is one point in the above argument worth keeping in mind. But you should also note that simply investing in a load fund often means that, if done through a broker, you'll likely be charged some sort of fee - not to mention the fact that the fund itself will have its own fee baggage beyond its load. There are a few good load funds that have delivered some of the lowest-priced funds over the long term, because operating fees are low. U.S. Highway 1, North Palm Beach, Fl. Bankrate Inc. all rights reserved.