Date Posted: May 25, 2005

Insight May 2005 Monthly Update

“Since our last research article on the topic in May 2003, load trends in the mutual funds industry can be summarized in four words— more of the same. In June 2000 we reported a shift in load charges away from the back-end load (deferred sales charge, or DSC) format, which dominated the load structure of mutual funds, to front-end load products. Why has this trend continued to gain momentum? Mounting pressure from advisors demanding more flexible load structures, such as level loads, is one reason. Growing disappointment from F-class (no embedded dealer compensation) fund manufacturers who expected a rapid accumulation of assets is another. Our data on load fund assets and sales measures is compiled quarterly from companies representing 94% of the load fund asset base. Insight subscribers have read our research concerning load industry trends in the past. However, in this report we were able to take advantage of our vast client base and consult fund industry sales, marketing and product development executives to discuss the issues and implications surrounding the evolution of load structures.”
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