The terms "no-load" and "mutual fund" are rarely heard apart these days and yet mutual funds that charge a load — an up-front broker's commission — are still around and doing a pretty good business at that.

Since you're really paying for investment "advice" and not getting anything special in return, why do load funds persist and why do people buy them?

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Jim Peterson, head of Charles Schwab & Co.'s (SCHW) mutual fund research, says it's simply a case of brokers and financial advisers out to earn a commission. Usually, he says, investors can get similar mutual funds without a load. And if long-term stock-market returns decline in the future, as he predicts they will, a percentage point here or there will really eviscerate your earnings.

"There's no investment value whatsoever to paying a load," says Peterson.

Back when mutual funds were still a relatively new invention, most charged a load. But as mutual funds proliferated, no-load funds became the norm, says Tom Roseen, a senior research analyst at Lipper.

There are three types of load: a front-end load when you buy (typically around 5% and by far the most common kind); a back-end load (which may decline the longer you hold onto your shares) when you sell or a level load (usually 1%) each year.

Few are the reasons to consider front-end loads. They usually shrink the more money you invest. And when funds have one share class with a load and one without, the former often has a lower expense ratio, which is the annual costs of marketing, transactions and other regular expenses that are passed on to investors. So the longer you invest for, the less that sales commission hurts you.

Still, there's no reason to pay a load for an index fund or other passively managed fund.

Since the stock market decline of 2000 to 2002, investors have put more money into load funds and big, reliable no-load families like Janus and Fidelity have added load funds to their stable.

Roseen thinks investors who got hurt by the last bear market are now willing to pay for advice on what to buy. Investors, says Roseen, should focus on performance and return, not just expenses.

Peterson thinks load funds take investors for a ride. "There's a lot fund companies out there and the only way they're going to sell their shares is to give a sales commission to brokers," he says.

Both analysts say they personally prefer no-loads.

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