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.
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
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