No-load funds are not hard to find, yet investors continue to pay up-front broker commissions to get in the market, according to MarketWatch.

Brokers and financial advisers charge the commissions for "advice," but Jim Peterson, head of mutual fund research for San Francisco-based Charles Schwab, argues that front-loaded funds are just a way for interested parties to make a buck.

"There's no investment value whatsoever to paying a load," he said.

And although investors don't seem to care so much now that there are similar, but sans-fee funds, Peterson predicts that long-term stock-market returns will start sinking, and when they so, investors will start paying careful attention to every percentage point.

Loaded funds were far more common when mutual funds were first introduced. But with time, that trend shifted, and the majority of funds stopped charging fees, according to Tom Roseen, senior researcher at Lipper of New York.

Loads come in three varieties: front-end, where investors pay, typically, 5% at the time they purchase the fund; back-end loads, which can decrease with time, depending on how long investors cling to funds; and, level-loaded funds, which levy a consistent, annual fee, typically 1%.

When purchasing an index or passively managed fund, loads make next to no sense.

Still, since the bear market of 2000 to 2002, investors have increasingly turned to loaded funds, and industry powerhouses such as Boston-based Fidelity Investments and Denver-based Janus Capital Group, have added loaded funds. The reason companies have begun introducing these less-attractive options is that since the millennial downturn, investors have been more willing to pay for advice and reassurance, Roseen said, when they really should focus on performance and return.

Peterson offers another reason.

"There's a lot of fund companies out there and the only way they're going to sell their shares is to give a sales commission to brokers," he said.

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

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