What Is a Mutual Fund Load?
Mutual fund transactions can be complicated, especially with the fees and expenses that accompany the process. It’s important to understand mutual fund load charges and exactly what they entail so you can make informed investing decisions. A “load” is a fee charged to an investor who buys or redeems shares in a mutual fund. It is similar to the commission that investors pay when they purchase a stock. There are two general types of sales loads. If a sales load is required at purchase, it is called a “front-end” sales load; if it is charged when shares are redeemed, it is a deferred or “back-end” sales charge.” The most common type of back-end sales load is a “contingent deferred sales charge” or CDSC. The amount will depend on how long an investor held the shares, and it could be nothing if they were held long enough. Loads generally compensate brokers and/or salespeople for selling you a fund. For example, it might help compensate a financial professional who spends time with you at t
