Mutual Fund Front-End Loads
Mutual Fund Front-End Loads
Front-end loads are sales charges that are levied when you buy shares in a mutual fund. Front-end loads may not exceed 8.5 percent of the amount invested. Most funds charge less than 8.5 percent, however.
Things To Know
- Front-end loads are deducted from the offering price of a fund’s shares.
How they work
Front-end loads are deducted from the offering price of a fund’s shares, and the balance goes into the fund. For example, if a fund charges a 5 percent front-end load and you invest $1,000 into it, $950 will go into the fund. The other $50 will compensate the brokers, financial advisors, or other sales personnel.
Other names for front-end loads
A sales load may be identified by several different names. It may also be called a maximum sales load on purchases, sales load imposed on purchases, or any of many other similar names.
