DEFINITION of 'Hidden Load'

An undisclosed fee or sales charge, which is often hidden in the fine print of a fund's prospectus or in an insurance contract. In some cases, investors and clients do not realize they are paying the hidden load, as explicit attention is never drawn to the issue.

BREAKING DOWN 'Hidden Load'

A hidden load is a cost that a customer is typically never told about. For example, most investors are unaware of the 12b-1 fee that mutual funds often charge. With this hidden load, the investor will pay an small, annual charge to cover the fund's promotional and advertising expenses.

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RELATED FAQS
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    A mutual fund is simply a large group of people who lump their money together for a management company to invest. Shares ... Read Answer >>
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