Even as front-end load-based mutual funds lose market share, they're losing popularity with
Bloomberg. Ben Steverman
writes that putting your money in front-loaded mutual fund is "like paying a lifetime's rent for a place you might live for only a few years."
The pub notes that, according to Investment Company Institute (
ICI) data, $110 billion net flowed out of front-loaded mutual funds last year, while $24 billion net flowed into no-load mutual funds.
Bloomberg cites
American Funds' $130-billion
Growth Fund of America as an example. The load shares cost 575 basis points up front and 68 bps per year, while the no-load shares cost 146 bps, meaning that the load shares are cheaper after eight years.
The pub cites
A Random Walk Down Wall Street author
Burton Malkiel's staunch opposition to front-loaded mutual funds. Others who weighed in include:
Dan Candura, chief executive officer of
PennyTree Advisers;
Kevin Carroll, managing director and associate general counsel at the Securities Industry and Financial Markets Association (
SIFMA);
Tamar Frankel, a law professor at
Boston University;
Bob Grohowski, senior counsel at the ICI;
Alan Palmiter, a law professor at
Wake University; a 2009 study led by
Harvard Business School professor
Daniel Bergstresser; and data from
Strategic Insight. 
Edited by:
HFD
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