Low-load funds are extremely similar to back-end loaded mutual funds, or deferred sales charge type mutual funds.† The main difference between back-end load and low-load funds is the time frame that investors must hold the fund in occur to avoid sales charges on disposition.

When investors purchase low-load funds, the advisors and brokers are paid at that point by the mutual fund company.† In essence the mutual fund companies are prepaying the advisor for the investor holding the actual fund for a certain number of years.† However, if investors sell the mutual fund units prior to a specified holding period, normally 3-5 years, the investor will pay a back-end load or low-load sales charge.† Low-load sales charge fees typically start at 3 or 4 percent and are discounted for each year an investor owns units in the mutual fund.† The schedules and fees are described in detail in the mutual fund prospectus.† The low-load typically goes to zero after holding the fund for a period of 3 to 5 years.†

Mutual fund values are not guaranteed and individuals can lose money on mutual fund investments.† Investors should read the mutual fund prospectus prior to making an investment decisions.† Mutual fund purchases should be made taking into consideration an individualís investment experience, investment objectives, time horizon and risk tolerance level.

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