What Is a Mutual Fund Sales Load?
What Is a Mutual Fund Sales Load?
A load is a sales charge that is included in the price you pay when you buy or sell shares of a mutual fund.
Things To Know
- The sales load is used to compensate registered representatives for their efforts in distributing shares.
The purpose of the load
Load funds distribute their shares to the public through registered representatives who advise their customers about the funds. Funds may use outside financial advisors and brokers, or they may use in-house personnel. The load is used to compensate registered representatives for their efforts in distributing the shares. By law, sales charges may not exceed 8.5 percent of the amount invested. Competition among funds, however, has led many funds to lower their sales charges or even eliminate them entirely.
You can find a mutual fund’s sales load in the expense section of its prospectus.
