Load Fund

What is a 'Load Fund'

A load fund is 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. The load is either 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).

BREAKING DOWN 'Load Fund'

If a fund limits its level load to no more than 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
  1. No-Load Fund

    A mutual fund in which shares are sold without a commission or ...
  2. Front-End Load

    A commission or sales charge applied at the time of the initial ...
  3. Back-End Load

    A fee (sales charge or load) that investors pay when selling ...
  4. Load

    A sales charge or commission charged to an investor when buying ...
  5. Level Load

    An annual charge deducted from an investor's mutual fund assets ...
  6. 12B-1 Plan

    A no-load mutual fund that is allowed to use fund assets to pay ...
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RELATED FAQS
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