No Transaction Fee Mutual Fund

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Definition of 'No Transaction Fee Mutual Fund'

A no-transaction fee mutual fund is a type of mutual fund that does not charge a fee when investors buy or sell shares. This can be a significant savings for investors, as transaction fees can eat into returns.

There are a few things to keep in mind when investing in a no-transaction fee mutual fund. First, it is important to understand that these funds are not necessarily the best choice for all investors. Some no-transaction fee funds may have higher expense ratios than other funds, which can offset the savings from the lack of a transaction fee. Additionally, some no-transaction fee funds may have lower liquidity than other funds, which means that investors may not be able to sell their shares as easily.

Second, it is important to remember that no-transaction fee funds are still subject to market risk. This means that the value of your investment can go up or down, and you may not get back the amount of money you invested.

Finally, it is important to do your research before investing in any mutual fund, regardless of whether or not it charges a transaction fee. Make sure you understand the fund's investment objectives, risk level, and historical performance before you invest.

If you are looking for a low-cost way to invest in the stock market, a no-transaction fee mutual fund may be a good option for you. However, it is important to do your research and understand the risks involved before you invest.

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