Should I always pay a commission when buying mutual funds?

There are three main types of mutual funds when it comes to commissions. Basically, there are front-end load, back-end load and no-load funds. The one that you choose depends primarily on the type of investment that you want to have, however, it is definitely not the case that you should always pay a commission when buying mutual funds.

Front-end load funds require you to pay the commission fee when you first buy shares of the fund. In this case, your fund manager will get money as soon as you join the fund. Back-end load funds will not require a commission fee when you join, but you will end up paying a commission after you sell your shares. However, if you do not want to pay a commission, or if you decide that you would rather try a commission-free fund, then you should look for a no-load funds. There are actually a lot of these funds available.

Most of the no-load mutual funds are also larger funds. This means that there will be a lower chance of making a lot of money off the fund – but overall, these funds are generally a bit safer.

However, even if you are not paying a commission for the mutual fund that you join, you will still need to pay some money to the person who is handling your mutual fund. In no-load funds, that will come in the shape of fees. If you are primarily concerned with the amount of money that you end up spending on fees and commissions, then you will need to take a close look at the funds that you are joining and how much money you intend to invest. It is possible that a commission fund will cost less than a fund that is based entirely on fees would.

Some fund managers say that it is a good idea to go with a fee-based fund instead of one that is based entirely on commission. The reason for this is that the commission-based funds can sometimes create a conflict of interest for the fund manager. In any case, you should not always pay a commission when buying a mutual fund because there are a lot of other factors that you should consider before you decide which fund you want.