By Russell Wild

An astonishing number of bond funds charge loads. A load is nothing more than a sales commission, sometimes paid when buying the fund (that’s called a front-end load) and sometimes paid when selling (that’s called a back-end or deferred load).

NEVER PAY A LOAD. There is absolutely no reason you should ever pay a load of (not unheard of) 5.5 percent to buy a bond fund. The math simply doesn’t work in your favor.

If you pay a 5.5 percent load to buy into a fund with $10,000, you lose $550 up front. You start with an investment of only $9,450. Suppose that the fund manager is a veritable wizard and gets a 7 percent return over the next five years, whereas similar bond funds with similar yearly operating expenses are paying only 6 percent. Here’s what you’ll have in five years with the load fund, even though there’s a wizard at the helm: $13,254. Here’s what you’d have with the no-load fund, assuming the manager is merely average: $13,382.

Russells rule: Buying a load bond fund is plain and simple dumb. Unless you get some kind of special deal that allows for the load to be waived, don’t buy load funds. Repeat: Don’t buy load funds.