Spread-Load Contractual Plan

AAA

DEFINITION of 'Spread-Load Contractual Plan'

A fee-payment structure applicable to mutual funds in which the sales charge or commission (load) is not entirely paid at the time the investor first contributes funds to the mutual fund (or in the first several contributions either). Instead, the mutual fund load is dispersed across an extended time period, so that the load is more accurately applied to each contribution.

INVESTOPEDIA EXPLAINS 'Spread-Load Contractual Plan'

This type of load payment plan allows greater portions of the investor's initial contributions to the account to be applied to actual investments, instead of sales charges. By doing so, the investor is able to gain a relatively larger position in the mutual fund in the short term, but their future contributions to the fund will be marginally smaller than they would have been without such a plan.

RELATED TERMS
  1. Expense Ratio

    A measure of what it costs an investment company to operate a ...
  2. Front-End Load

    A commission or sales charge applied at the time of the initial ...
  3. Load Fund

    A mutual fund that comes with a sales charge or commission. The ...
  4. Open-End Fund

    A type of mutual fund that does not have restrictions on the ...
  5. Net Asset Value - NAV

    A mutual fund's price per share or exchange-traded fund's (ETF) ...
  6. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
Related Articles
  1. Mutual Funds & ETFs

    The Advantages Of Mutual Funds

  2. Mutual Funds & ETFs

    Published Mutual Fund Returns Not Always ...

  3. Mutual Funds & ETFs

    Mutual Fund Basics Tutorial

  4. Chart Advisor

    A Total Stock Market ETF For Any Portfolio

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center