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What are no-load, front-end load, and back-end loaded funds?

April 26, 2017back-end front-end funds load loaded no-load

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What are no-load, front-end load, and back-end loaded funds?

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No-load funds do not have a sales charge, while front-end and back-end loaded funds do. However, at RBC Direct Investing, we charge you 0% when you buy a front-end load fund. Back-end loaded funds contain a sales charge when the funds are sold. The charges for front-end load funds vary among institutions. Back-end loaded fund sales charges usually start at 6 or 7 percent in the first year and gradually decline to 0 as the fund is held for six or seven years. The longer an investor holds the back-end loaded fund, the less he or she will pay when it is sold.