 |
Definition of 'Redemption Fee'
A fee collected by an investment company from traders practicing mutual fund timing. This stiff penalty is used to discourage short-term, in-and-out trading of mutual fund shares. Generally, the fee is in effect for a holding period from 30 days to one year, but it can be in place for longer periods.
Also referred to as an "exit fee", "back-end load" or "contingent deferred sales charge".
|
 |
Investopedia explains 'Redemption Fee'
Mutual fund timing is a legal but frowned-upon practice that has a negative effect on a fund's long-term investors. Mutual fund timing means that investors may be subjected to higher fees occasioned by the transaction costs of the short-term trading of fund shares.
After the designated minimum holding period for an investment in a fund has elapsed, investors are not charged for redeeming shares of the investment. If incurred, redemption fees do not go to the investment company, but are credited to the fund's assets.
|
Search results for 'Redemption Fee'
-
http://www.investopedia.com/ask/answers/07/redeem_mutual_fund.asp
... 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. ...
-
http://www.investopedia.com/professionals/questionoftheweek/series6/100605.asp
... BID: $15.00 -- ASK: $16.00. If the fund charges a 1% redemption fee, her redemption
proceeds will be: a) $14,850 b) $15,000 c) $15,840 d) $16,000. ...
-
http://www.investopedia.com/university/quality-mutual-fund/chp8-fund-cost-expense
... Redemption Fee Designed to discourage market timers, an increasing number of mutual
funds are charging a flat fee, usually 1%, on withdrawals (shares redeemed ...
-
http://www.investopedia.com/university/quality-mutual-fund/chp8-fund-cost-expense/
... Redemption Fee Designed to discourage market timers, an increasing number of mutual
funds are charging a flat fee, usually 1%, on withdrawals (shares redeemed ...
-
http://www.investopedia.com/university/quality-mutual-fund/chp8-fund-cost-expense/default.asp
... Redemption Fee Designed to discourage market timers, an increasing number of mutual
funds are charging a flat fee, usually 1%, on withdrawals (shares redeemed ...
-
http://www.investopedia.com/articles/financialcareers/07/etf-401k.asp
... They cost less than mutual funds and index funds and have no short-term redemption
fees. In short, they come without the "fee baggage" that goes along with ...
-
http://www.investopedia.com/exam-guide/series-7/packaged-securities/mutual-fund-fee-breakpoint.asp
... Advertisment - ExamPrep continues below. Some funds may charge a redemption fee,
or back-end load, depending on their management fee policy. ...
-
http://www.investopedia.com/articles/pf/08/money-manager-or-alone.asp
... In that same year, the average performance fee was 19.6%. ... However, mutual funds,
because they often contain redemption fees, and/or large front-end loads, are ...
-
http://www.investopedia.com/articles/mutualfund/05/ETFdollarcost.asp
... different fund. Many funds charge a redemption fee if assets are not held in
the account for at least a certain period. When calculating ...
-
http://www.investopedia.com/articles/retirement/08/401k-exam.asp
... For example, it's possible that a particular fund may suddenly charge a 2% redemption
fee if the investor liquidates his or her holdings within a 90-day period ...
|
|
