Front-End Load

What Does Front-End Load Mean?
A commission or sales charge applied at the time of the initial purchase for an investment, usually mutual funds and insurance policies. It is deducted from the investment amount and, as a result, it lowers the size of the investment.

Investopedia explains Front-End Load
Front-end loads are paid to investment intermediaries (financial planners, brokers, investment advisors) as sales commissions. As such, these sales charges are not part of a mutual fund's operating expenses. It is argued that a load is a cost that investors incur for obtaining an investment intermediary's expertise in selecting appropriate funds for clients. It is a matter of record that load funds do not outperform no-load funds.

Generally, the sales charge on a load mutual fund will be waived if such a fund is included as an investment option in a retirement plan such as a 401(k).

Filed Under: 401K, Insurance, Mutual Funds, Retirement

Related Terms

Back-End Load
Breakpoint
Commission
Incubated Fund
Investor Shares
Load Fund
Mutual Fund
Mutual Fund Wrap
No-Load Fund
Service Shares
More Related Terms

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