No-Load mutual funds are funds that do not charge any fees when buying or selling shares of the fund; while load mutual funds charge an explicit fee at entry, exit or both. With most actively managed funds losing out to index funds, one is hard pressed to find funds that will beat the market, leave alone funds with load that will beat the market over the long haul. It is difficult to justify the cost of the load and its potential drag on the overall performance of your investment.

It is hard to target the best no load mutual funds simply by looking at management fees, or even the average ten-year performance of the fund. It may just happen that a given management style was in favor in the market over that period of time, and if the style goes out of favor going forward, you may have just picked the wrong horse to ride on. For example, in the late 90's, no load mutual funds backing Internet stocks were doubling every year - but they crashed and burned and are even now (seven years later) trading at below their par value of the time. Similarly, large-cap stocks may occasionally have their day in the sun, while small-caps excel at other times.

The top qualities you should seek in the best no load mutual funds are:

• Diversified to handle the different market moods
• Solid, consistent management style over two-decades or more
• Same management team (with only minor changes)
• Exposure to national and international stocks
• Large margin of safety in purchases (downside protection)

With these qualities in mind, the best no load mutual funds tend to be value oriented funds, with a long history of management behind it. The two we tend to favor are:

Dodge & Cox Stock Fund - This is a large cap value stock fund with a long history of management, and solid results. The fund has good downside protection, and in any given year, will not be down anymore than 10-15% - which itself is rare. In up years, occasionally they may not match up to the S&P 500 - but over a five-year haul or longer, they will average better results, and with limited downside years, the cumulative average will be much higher (see "Losing your Shirt in Investing").

Legg Mason Value Trust - This is another value stock fund with a history of beating the averages. Bill Miller continues to bring strong depth and long years of experience to stock picking in this fund.

Amongst indices, it is better to stick with small cap value indices, such as the Russell value indices, or other ETFs that mimic the Russell index.

While there are good growth no load mutual funds out there, we believe that the best no load mutual funds tend to be found in the value arena.