Load Fund

What Does Load Fund Mean?
A mutual fund that comes with a sales charge or commission. The fund investor pays the load, which goes to compensate a sales intermediary (broker, financial planner, investment advisor, etc.) for his or her time and expertise in selecting an appropriate fund for the investor.

Investopedia explains Load Fund
The load is paid up front at the time of purchase (front-end load), when the shares are sold (back-end load), or as long as the fund is held by the investor (level-load).

If a fund limits its level load to no more that 0.25% (the maximum is 1%), it can call itself a "no-load" fund in its marketing literature.

Front-end and back-end loads are not part of a mutual fund's operating expenses, but level-loads, called 12b-1 fees, are included. The record shows that the performance of load and no-load funds is similar.

Related Terms

Advisor Fee
Back-End Load
Contingent Deferred Sales Charge - CDSC
Exchange Privilege
Exit Fee
Foregone Earnings
Front-End Load
Investor Shares
Mutual Fund
No-Load Fund
More Related Terms

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