No Transaction Fee (NTF) Funds

Non Transaction Fee or NTF funds, also known as No Transaction Fee Mutual Funds, are no-load mutual funds without any commission charges. Like no-load mutual funds which are usually offered directly through the investment company without any commission charges, NTF funds are offered through a brokerage firm without any transaction fee.

Non transaction fee funds are advantageous for investors who wish to reduce the commission charges and have long-term profit goals. Often there is not much performance difference between NTF funds (or no-load funds) and funds with transaction fees (load funds). So it is always a good option to reduce trading costs. Brokers offering NTF funds are benefited by 1) attracting more customers by providing a range of low/no fee products, and 2) by getting compensation from mutual fund issuing firms – usually as marketing firms.

Not all brokers offer no transaction fee funds; and also the number and type of funds available differ considerably between brokers. At times the trader/investor needs to meet certain conditions/terms for getting no transaction fee. Usually there are restrictions in short-term fund redemptions. Some brokerage firms charge price for Broker assisted trading of NTF funds.

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