Does eliminating the sales load really make much difference?
A. We ll let you be the judge of that. Suppose that you decide to invest $10,000 in Fund XYZ which charges a 5% front-end sales load. If for some reason you had to sell your investment, you would receive $9,500–not $10,000, assuming an unchanged share price. In other words, just to break even, your investment has to earn $500 either through dividends or capital appreciation. To put it another way, when you invest in Fund XYZ, you have an immediate negative 5% return. A deferred load (known as a contingent deferred sales charge) has the same end result, but delays the payment of the load until you sell your shares of the fund. Suppose you decide to purchase Fund XYZ s “Class B” shares which are subject to a deferred sales charge. If you have to sell your investment within the first year, you ll be subject to as much as a 5% charge which will come directly out of your investment principal. The deferred charge generally declines over a number of years, so if you hold your investment long
