What is a Load Fund?
A mutual fund which charges investors fees is called a load fund. No-load mutual funds do not charge “sales load” type fees, but they are allowed to charge the shareholder other types of fees. A load fund pays one or more brokers who make the mutual fund’s stock and bond transactions. These broker fees are passed on to the shareholder of the load fund in the form of various shareholder fees. The shareholder fees of a load fund can be arranged in several different ways. Some load funds charge fees at a regular period. Some load funds charge a fee to investors when they purchase their shares. A load fund can also charge fees to the shareholder at the time of sale. If a load fund charges the shareholder when he or she purchases shares of the fund, the fees are known as “front-end sales load” fees. Front-end fees on a load fund are taken out before the money is used to purchase shares. An investor in a front-end fee load fund should keep this in mind when calculating the investment. For ex
A load fund is a mutual fund whose shares are sold by stockbrokers, financial planners and some types of financial institutions for a commission. The professional or institution that sells the funds charges a commission, or “load,” every time you buy new shares. For example, if you invest $10,000 but the broker charges an 8% load, only $9,200 of your money will actually be used to buy shares in the fund.
