Over the years the mutual fund industry has changed quite a lot. Several years ago almost all of the mutual funds were loaded mutual funds. Luckily, over time no load mutual funds have gained popularity in a big way.

A loaded fund is a fund that has a sales charge. The most common types of loaded funds are front end loaded funds and back end loaded funds. Many of these funds will either take around 5% out of your investment upfront, or when you redeem your shares in the fund.

No load mutual funds have no sales charge. There is no subtracting of money when you initially invest or when you redeem your shares. This chart from Yahoo Finance shows just how much of a difference the no load mutual fund will make vs the loaded front-end and back-end fund.

It used to be that investors had little choice but to go ahead and pay the sales charges of the loaded funds, but since they now have many choices I see no reason to go for the loaded mutual funds. There are literally thousands of no load mutual funds out there for investors, so there is no shortage of choices. Don't let your investment start out the game two steps behind, buy into no load mutual funds only!