Allocation Rate

The Allocation rate helps you to pick a mutual fund with fewer expenses. If this rate is high then the amount of money that actually benefits from the investment is much greater.

For example say a mutual fund has an initial front end cost of 3%. That means your investment will get charged 3% and only after that the remaining 97% of your money will go towards the investment.

So this is a very important factor to consider. If the percentage of your money that actually goes towards the investment is below 90% or even below 95% then it probably isn’t a very smart thing to do. Finding a fund with the lowest costs is something to consider, but not the only thing.