A no load mutual fund charges no commission when shares are sold. Commission is avoided on sales because shares are redeemed and distributed directly from the investment company, without the use of another, independent party.

A no load mutual fund means that all the money in the fund is working for the investor, instead of going to commissions. Alternately, load funds charge front-end, back-end, or sales charges. Investors who are conscious of fees tend to favor no-loads, since the absence of load fees means an overall better net return. Comparison of load and no load mutual funds have shown that the no load funds outperform load funds.

A no load fund may include a 12b-1 fee, which is the cost of distribution. This small fee is part of the no load fund’s expense ratio.

Some investors may be more comfortable with load funds and willing to pay the additional fees these funds incur. People who feel they need to depend on the services of a broker – for a number of reasons – may stick with load funds. These investors may not have time to do their own research, or may feel more comfortable having access to an advisor for input and decision making.

Kiplinger’s has a list of top no-load funds at http://www.kiplinger.com/investing/kip25/. Scottrade also compares mutual funds at http://research.scottrade.com/public/funds/overview/overview.asp