NTF Funds at Charles Schwab + Best 3 NTF Funds at TDA
Charles Schwab provides an extensive list of mutual funds. You can find virtually any type of mutual fund at the popular broker. Among the many available options are no transaction fee mutual funds, also known as NTF mutual funds.
NTF mutual funds do not cost anything to purchase or sell, making them great for investors looking to trim investment costs. By choosing no-load mutual funds, you get to keep more of the money the fund strategy provides.
Continue reading to learn more about no transaction fee mutual funds and our favorite three NTF funds Charles Schwab.
Best 3 NTF Mutual Funds on Charles Schwab
Choosing the best three no transaction fee mutual funds from the thousands on offer at Charles Schwab is no easy task. However, using the broker’s Premier Morningstar List, we were able to find a great starting point for you to consider.
Jensen Quality Growth Fund Class J (JENSX)
American Funds New World Fund Class F-1 (NWFFX)
Vanguard High-Yield Tax-Exempt Fund (VWAHX)
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What Are No Transaction Fee Mutual Funds?
If you are unsure about NTF mutual funds or how they work, here is a short description to catch you up.
Traditionally, mutual funds have not been free to buy or sell. Mutual funds are professionally managed asset baskets, and commissions for fund management have always been commonplace.
While many mutual funds still come with commission fees, a growing number of them are getting rid of transaction fees altogether.
No transaction fee mutual funds, also known as NTF mutual funds and no-load mutual funds, do not charge front-load (buying), back-load (selling), or level-load (percentage based as you hold) commissions.
Morningstar Premier List Funds
The Morningstar Premier mutual fund list is the simplest way to get curated lists of top-rated mutual funds with no transaction fee. Updated quarterly, investors get access to the best mutual funds Charles Schwab has to offer without putting in hours of research time.
The Morningstar Premier list tool lets you select specific criteria to narrow the results even further. Once your Premier list populates, you can then sort the results based on the criteria you value most.
Using Charles Schwab’s Mutual Fund Screening Tool
Charles Schwab provides a powerful mutual fund screener that makes it easy to find funds to invest in.
A wide range of fund types is available in predefined scans, including categories like income-oriented funds, specialty funds, lifecycle funds, bond funds, international equity funds, and index funds. You can also filter results based on their Morningstar rating and expense rates.
You can create your own scan if you do not see anything you like in the predefined screens section of Charles Schwab’s mutual fund screener tool.
Comparing Mutual Funds
In addition to Charles Schwab’s mutual fund screener, there is also a mutual fund comparison tool to help you see the differences between funds you are interested in.
There are two ways to compare mutual funds using the tool. You can enter the ticker for one mutual fund and let the comparison tool create a list of comparable funds for you to review. Or, you can input your own list of mutual funds (separated by commas) that you want to compare.
The comparison tool allows you to view all the most critical information at a glance.
Who Benefits from an NTF Mutual Fund?
If you are wondering whom NTF mutual funds are best suited for, the answer may be more straightforward than you expect.
The performance of NTF and load mutual funds is very similar. Mutual funds with load fees sometimes have more features baked in, but expected returns are comparable to their no-load counterparts.
Investors that choose no-load mutual funds generally do so for the lower cost basis the funds provide.
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Mutual Fund Fees
Although there are no load fees associated with NTF mutual funds, it is good to remember that some costs may still exist. It is often difficult to determine which fees your no-load mutual fund comes with, but the prospectus outlines everything.
It is always a good idea to do your homework before investing in anything, and the prospectus of the mutual fund you are interested in is a great place to start. You may find any combination of the following fees.
Early Redemption Fees
Most mutual funds are designed for long-term investment strategies and are on the ‘safer’ side of the investment product lineup. Fund managers often charge fees to discourage investors from frequently buying and selling.
The most common of these fees is an early redemption fee, usually around $49.99.
Exchange Fees
Some mutual funds also come with exchange fees that are passed along to individual investors. While exchange fees are relatively small, they can add up in larger accounts.
Account Management
Account management fees are also fairly common. Sometimes referred to as maintenance fees, these charges (when applicable) usually hit your account once a year or once a quarter. Account management fees come as a flat rate or as a percentage of your mutual fund position.
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