Deferred Load

AAA

DEFINITION of 'Deferred Load'

A sales charge or fee that is assessed when an investor sells certain classes of fund shares before a specified date. Deferred loads usually run on a flat or sliding scale for one and seven years after purchase, with the load/fee eventually dropping off to zero. Deferred loads are most often assessed as a percentage of assets.


INVESTOPEDIA EXPLAINS 'Deferred Load'

Deferred loads are becoming a much less-used feature of investment companies, thanks to the exploding popularity of exchange-traded funds (ETFs) and no-load mutual funds. Investors now have thousands of choices in the no-load arena, although deferred loads are still found in many types of insurance products, such as annuities and even in many hedge funds. These types of charges are typically put in place to discourage against short-term investment in favor of a buy-and-hold strategy amongst its investors.


RELATED TERMS
  1. Back-End Load

    A fee (sales charge or load) that investors pay when selling ...
  2. Contingent Deferred Sales Charge ...

    A fee (sales charge or load) that mutual fund investors pay when ...
  3. Load Fund

    A mutual fund that comes with a sales charge or commission. The ...
  4. No-Load Fund

    A mutual fund in which shares are sold without a commission or ...
  5. Exit Fee

    A fee or charge assessed to an investor for withdrawing money ...
  6. Subaccount Charge

    Fees charged for the management of an investment fund.
Related Articles
  1. The creation and redemption process for ETF shares is almost the exact opposite of that for mutual fund shares.
    Mutual Funds & ETFs

    An Inside Look At ETF Construction

    If you're an investor who likes to understand how and why your investment products work, this article is for you!
  2. Mutual Funds & ETFs

    How To Pick A Good Mutual Fund

    Learn how to evaluate mutual funds and find the right one for you.
  3. Investing

    Can I sell mutual fund shares below their minimum intial purchase amount without being penalized?

    Yes. You can freely buy and sell shares of a mutual fund regardless of any requirement for a minimal initial purchase amount or the application of a redemption fee. In this sense, the investment ...
  4. VelocityShares 3x Long Crude Oil ETN has the potential for huge returns, but there are several reasons why you might want to steer clear for now.
    Mutual Funds & ETFs

    A Leveraged Oil ETN For The Future (Just Not Now)

    VelocityShares 3x Long Crude Oil ETN has the potential for huge returns, but there are several reasons why you might want to steer clear for now.
  5. Latin American exchange-traded funds combined two of the hottest buzzwords of recent years: Emerging markets and low fees. Here are the biggest.
    Mutual Funds & ETFs

    Want To Invest In Latin America? Here are 22 ETFs

    Latin American exchange-traded funds combined two of the hottest buzzwords of recent years: Emerging markets and low fees. Here are the biggest.
  6. Mutual Funds & ETFs

    What is the difference between a hedge fund and a private equity fund?

    Learn the primary differences between hedge funds and private equity funds, both of which are utilized by high net worth investors.
  7. Mutual Funds & ETFs

    How do hedge funds determine what assets to own?

    Learn about the various types of investments that hedge fund managers use, and explore basic hedge fund management trading strategies.
  8. Mutual Funds & ETFs

    Where does a hedge fund get its money?

    Learn how a hedge fund is structured and how the managing partner of the fund goes about the process of finding and soliciting investors.
  9. Mutual Funds & ETFs

    What is the purpose of a hedge fund?

    Find out what a hedge fund is, how it is set up and why it is different than other forms of investment partnerships like mutual funds.
  10. Insurance

    Who are the best-rated life insurance companies in the US?

    Learn about what makes an insurance company the best. Read about the best life insurance companies in the U.S. in 2014, following ratings by Weis.

You May Also Like

Hot Definitions
  1. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  2. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  3. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
  4. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents ...
  5. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
  6. Law Of Supply And Demand

    A theory explaining the interaction between the supply of a resource and the demand for that resource. The law of supply ...
Trading Center