Back-End Load
 |
Definition of 'Back-End Load'A fee (sales charge or load) that investors pay when selling mutual fund shares within a specified number of years, usually five to 10 years. The fee amounts to a percentage of the value of the share being sold. The fee percentage is highest in the first year and decreases yearly until the specified holding period ends, at which time it drops to zero.Also known as a "contingent deferred sales charge or load." |
 |
Investopedia explains 'Back-End Load'The back-end load is a type of sales charge that is used with mutual funds that have share classes, which in this case are identified as Class-B shares. Class-A shares charge a front-end load, which is taken from an investor's initial investment. Class-C shares are considered to be a type of level-load fund - no front-end and low back-end loads, but the fund's operating expenses are high. In all cases, the load is paid to a financial intermediary, and is not included in a fund's operating expenses.In essence, funds with share classes carry sales charges (as opposed to no-load funds). The class you choose is what determines how much and when you pay. In employer-sponsored retirement plans, the loads are generally waived. |
Related Definitions
Articles Of Interest
-
How To Pick A Good Mutual Fund
Learn how to evaluate mutual funds and find the right one for you. -
January: Time To Read Your Mutual Fund's Annual Report
Don't let this valuable piece of mail end up in your trash can. Here are five things you need to know. -
Digging Deeper: The Mutual Fund Prospectus
The legal jargon of this document can be daunting. Find out how to get to the important stuff. -
The Future Of Mutual Funds
Decreases in mutual fund classes and the growing use of ETFs means the future of mutual funds will be anything but smooth. -
Where do I look for fees that I am charged on investments? What are those fees called?
The fees and expenses charged for investments vary. The fees usually depend on the type of investment and the investment company with which you are investing. Typical fees and expenses charged ... -
The Lowdown On No-Load Mutual Funds
These funds let you cut out the middleman - and the fees. -
Mutual Fund Basics Tutorial
Learn about the basics - and the pitfalls - of investing in mutual funds. -
Introduction To Treasury Inflation-Protected Securities (TIPS)
If you want to protect your portfolio from inflation, all you need are a few TIPS. -
6 Asset Allocation Strategies That Work
Your portfolio's asset mix is a key factor in whether it's profitable. Find out how to get this delicate balance right. -
How To Cut Your Mutual Fund Fees By Up To 90%
Most mutual funds don’t come close to beating the indexes they’re compared against. And yet they carry steep fees for active management. Find out how a little research and effort can cut your ...
Free Annual Reports