We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Investors always aim to make the best out of their total invested capital. Although, choosing mutual funds with best returns is the principal goal of investors, they also aim to reduce their expenses incurred while buying or selling funds. Due to this reason, no-load funds with low expense ratios are always targeted. For the third quarter, markets registered stable gains, but a weak September remained a concern for investors.
So, no-load mutual funds have gained popularity in recent times. Mutual funds with no sales or commission charges are known as no-load funds. This generally happens when the funds are traded directly through the investment company and not through some secondary entity.
Further, smooth gains in third-quarter lifted investor mood. The three key U.S. indexes, the Dow, S&P 500 and Nasdaq climbed 2.1%, 3.3% and 9.7%, respectively in the third quarter. Both the Dow and the S&P 500 posted four straight quarterly gains, while the Nasdaq closed in the green after two consecutive quarters of decline.
However, uncertainty over policy statements from the Fed and Bank of Japan (BOJ) weighed on the markets last month. Moreover, crude oversupply worries, modest economic growth and tension over U.S. presidential election took a toll.
Following these uncertainties, no-load funds along with low expense ratio could be a hit among investors, who want to bet on low-cost mutual funds.
Comparative Performance of No-Load Funds
Here, we have compared the average year-to-date (YTD) return of the top 100 no-load funds with the top 100 load funds. Out of the total 3,924 non-load funds, the top 100 funds registered an average YTD return of 36.2%, whereas from 1,672 load funds, the top 100 funds posted an average YTD return of 24.7%.
Moreover, the best performer among the no-load fund category, US Global Investors World Precious Mineral (UNWPX - Free Report) has YTD and third-quarter returns of 125.6% and 35.4%, respectively. The top load fund, VanEck International Investors Gold A (INIVX - Free Report) has YTD and third-quarter respective returns of 83.3% and 21.4%. With no-load funds registering comparatively better returns than load funds so far this year and the benchmarks registering strong gains in the third quarter, these are expected to have outperformed in the previous quarter.
Importance of Low Expense Ratio
High operating expenses negatively impact the total value of a mutual fund's assets, which in turn weigh on returns. So, a low expense ratio not only ensures efficient utilization of a fund’s assets, it also leads to encouraging returns for investors. An expense ratio between 0.5% and 0.75% is considered low, whereas any expense ratio above 1.5% is generally considered high.
Here, we have compared the top 100 mutual funds with a Zacks Mutual Fund Rank #1 (Strong Buy) and high- and low expense ratio mutual funds. The top 100 funds out of the total low expense ratio funds we studied have registered an average return of 12.1% YTD as compared to the top 100 high expense ratio funds’ average return of 11.6%.
5 Best Performing No-Load Funds to Buy Now
We have highlighted five no-load mutual funds with an expense ratio below 0.75% that carry a Zacks Mutual Fund Rank #1 (Strong Buy). Moreover, these funds have encouraging third-quarter returns. Additionally, the minimum initial investment is within $500 and net assets are above $50 million.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but also on the likely future success of the fund.
Bridgeway Omni Small-Cap Value N (BOSVX - Free Report) invests in small cap stocks that are believed to be undervalued. The fund is expected to invest in securities of companies traded in the NYSE, the NYSE MKT and NASDAQ. A maximum of 15% of BOSVX’s may get invested in securities of foreign companies. BOSVX has an annual expense ratio of 0.60%, lower than the category average of 1.37%. The fund has third quarter returns of 8.8%.
TIAA-CREF Large-Cap Value Premier (TRCPX - Free Report) seeks return over the long run primarily through growth of capital. TRCPX invests the lion’s share of its assets in equity securities of large-cap companies, which are expected to be undervalued. The fund invests in companies as defined by the fund's benchmark index, the Russell 1000 Value Index. TRCPX has an annual expense ratio of 0.56%, lower than the category average of 1.15%. The fund has third quarter returns of 5.3%.
DFA US Small Cap I (DFSTX - Free Report) generally invests its assets in a variety of domestic small-cap companies. DFSTX seeks growth of capital for the long run. The fund has an annual expense ratio of 0.37%, lower than the category average of 1.27%. The fund has third quarter returns of 5.2%.
PIMCO Fixed Income SHares M (FXIMX - Free Report) may invest 100% of its assets in mortgage- and other asset-backed securities that are believed to provide a fixed level of income. These securities include commercial mortgage-backed securities, collateralized mortgage obligations and mortgage pass-through securities. FXIMX has an annual expense ratio of 0.06%, lower than the category average of 1.02%. The fund has third quarter returns of 4.8%.
VALIC Company II Socially Responsible seeks appreciation of capital by investing mainly in equity securities. VCSRX invests the bulk of its assets in equity securities of companies, which meet the social criteria of the fund. The fund has an annual expense ratio of 0.56%, lower than the category average of 1.05%. The fund has third quarter returns of 4.2%.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
5 Best Performing No-Load Mutual Funds in Q3
Investors always aim to make the best out of their total invested capital. Although, choosing mutual funds with best returns is the principal goal of investors, they also aim to reduce their expenses incurred while buying or selling funds. Due to this reason, no-load funds with low expense ratios are always targeted. For the third quarter, markets registered stable gains, but a weak September remained a concern for investors.
So, no-load mutual funds have gained popularity in recent times. Mutual funds with no sales or commission charges are known as no-load funds. This generally happens when the funds are traded directly through the investment company and not through some secondary entity.
Further, smooth gains in third-quarter lifted investor mood. The three key U.S. indexes, the Dow, S&P 500 and Nasdaq climbed 2.1%, 3.3% and 9.7%, respectively in the third quarter. Both the Dow and the S&P 500 posted four straight quarterly gains, while the Nasdaq closed in the green after two consecutive quarters of decline.
However, uncertainty over policy statements from the Fed and Bank of Japan (BOJ) weighed on the markets last month. Moreover, crude oversupply worries, modest economic growth and tension over U.S. presidential election took a toll.
Following these uncertainties, no-load funds along with low expense ratio could be a hit among investors, who want to bet on low-cost mutual funds.
Comparative Performance of No-Load Funds
Here, we have compared the average year-to-date (YTD) return of the top 100 no-load funds with the top 100 load funds. Out of the total 3,924 non-load funds, the top 100 funds registered an average YTD return of 36.2%, whereas from 1,672 load funds, the top 100 funds posted an average YTD return of 24.7%.
Moreover, the best performer among the no-load fund category, US Global Investors World Precious Mineral (UNWPX - Free Report) has YTD and third-quarter returns of 125.6% and 35.4%, respectively. The top load fund, VanEck International Investors Gold A (INIVX - Free Report) has YTD and third-quarter respective returns of 83.3% and 21.4%. With no-load funds registering comparatively better returns than load funds so far this year and the benchmarks registering strong gains in the third quarter, these are expected to have outperformed in the previous quarter.
Importance of Low Expense Ratio
High operating expenses negatively impact the total value of a mutual fund's assets, which in turn weigh on returns. So, a low expense ratio not only ensures efficient utilization of a fund’s assets, it also leads to encouraging returns for investors. An expense ratio between 0.5% and 0.75% is considered low, whereas any expense ratio above 1.5% is generally considered high.
Here, we have compared the top 100 mutual funds with a Zacks Mutual Fund Rank #1 (Strong Buy) and high- and low expense ratio mutual funds. The top 100 funds out of the total low expense ratio funds we studied have registered an average return of 12.1% YTD as compared to the top 100 high expense ratio funds’ average return of 11.6%.
5 Best Performing No-Load Funds to Buy Now
We have highlighted five no-load mutual funds with an expense ratio below 0.75% that carry a Zacks Mutual Fund Rank #1 (Strong Buy). Moreover, these funds have encouraging third-quarter returns. Additionally, the minimum initial investment is within $500 and net assets are above $50 million.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but also on the likely future success of the fund.
Bridgeway Omni Small-Cap Value N (BOSVX - Free Report) invests in small cap stocks that are believed to be undervalued. The fund is expected to invest in securities of companies traded in the NYSE, the NYSE MKT and NASDAQ. A maximum of 15% of BOSVX’s may get invested in securities of foreign companies. BOSVX has an annual expense ratio of 0.60%, lower than the category average of 1.37%. The fund has third quarter returns of 8.8%.
TIAA-CREF Large-Cap Value Premier (TRCPX - Free Report) seeks return over the long run primarily through growth of capital. TRCPX invests the lion’s share of its assets in equity securities of large-cap companies, which are expected to be undervalued. The fund invests in companies as defined by the fund's benchmark index, the Russell 1000 Value Index. TRCPX has an annual expense ratio of 0.56%, lower than the category average of 1.15%. The fund has third quarter returns of 5.3%.
DFA US Small Cap I (DFSTX - Free Report) generally invests its assets in a variety of domestic small-cap companies. DFSTX seeks growth of capital for the long run. The fund has an annual expense ratio of 0.37%, lower than the category average of 1.27%. The fund has third quarter returns of 5.2%.
PIMCO Fixed Income SHares M (FXIMX - Free Report) may invest 100% of its assets in mortgage- and other asset-backed securities that are believed to provide a fixed level of income. These securities include commercial mortgage-backed securities, collateralized mortgage obligations and mortgage pass-through securities. FXIMX has an annual expense ratio of 0.06%, lower than the category average of 1.02%. The fund has third quarter returns of 4.8%.
VALIC Company II Socially Responsible seeks appreciation of capital by investing mainly in equity securities. VCSRX invests the bulk of its assets in equity securities of companies, which meet the social criteria of the fund. The fund has an annual expense ratio of 0.56%, lower than the category average of 1.05%. The fund has third quarter returns of 4.2%.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>