A no-load mutual fund is a fund that investors purchase directly from an investment firm, rather than going through a middleman. The direct-to-investor approach eliminates salesmen’s commissions and sales fees, and allows investors to put all their money toward an investment rather than losing small chunks of it to various fees. An index fund is a type of mutual fund constructed to mirror its earnings by the performance of an entire market index, such as the Dow Jones or NASDAQ index, thus buffering investors from volatility that may come with a mutual fund that focuses on a single sector of the market. As of July 2010, here are some of the more popular no-load index funds on the market.
California Investment S&P Index Fund (SPFIX)
With an initial purchase price of $1,000, the California Investment S&P Index Fund offers one of the most affordable minimum purchases offered on the S&P fund market. Additional purchases can be made in increments of $250. The Morningstar three-, five- and 10-year risk assessment for the fund, which invests mostly in large, medium-risk companies, has been rated at average or below average. Its expense ratio, which measures how much money is spent managing the fund, is 0.37 percent.
Fidelity Spartan 500 Index Fund (FSMKX)
With an expense ratio of 0.10 percent, the Fidelity Spartan 500 Index Fund is one of the leanest, most efficiently managed funds on the market. Its initial investment requirement of $10,000 makes a buy-in out of reach of many first-time investors. With assets purchased primarily from large companies and known for stocks that balance risk and growth, the fund’s three-, five- and 10-year rating from Morningstar has all been rated average.
Rydex NASDAQ 100 (RYOCX)
Investors comfortable managing riskier investments in hope of explosive returns may favor the Rydex NASDAQ 100. Its portfolio stresses large companies, but it places an emphasis on picking high-growth stocks. The strategy has been hit or miss for the fund, with Morningstar three-year return ratings high, but with 10-year returns low. An initial purchase of $2,500 is required, and the fund’s risk-management technique requires a more hands-on approach by funds managers, making its expense ratio a relatively high 1.30 percent.
Schwab 1000 Index (SNXFX)
Instead of tying its earnings to an across-the-market index, the Schwab 1000 fund indexes Charles Schwab’s top 1000 performing stocks. The medium-risk investment has a Morningstar risk-and-return rating of average for three-, five- and 10-year bands, as the nature of the 1000 index places its stocks in the largest and most mid-risk funds. The fund only requires a minimum purchase of $100, though its expense ratio is 0.29 percent, partially because of the number of transactions that come from the low buy-in cost.
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