Loading the player...

What is a 'Load'

A load is a sales charge commission charged to an investor when buying or redeeming shares in a mutual fund. Sales charge commissions can be structured in a number of ways. They are determined by the mutual fund company and charged by mutual fund intermediaries in mutual fund transactions. Common types of sales charges include front-end loads and back-end loads.


A load is a sales charge that compensates an intermediary for distributing shares of a mutual fund. Loads vary by share class and are determined by the mutual fund company. Mutual fund companies structure sales charges by share class. They provide a sales charge schedule in the mutual fund’s prospectus.

Loads can be front-end, back-end or level. Front-end and back-end loads are paid directly to intermediaries by the investor and are not accounted for in the fund’s net asset value (NAV) calculations.

Front-end load – Front-end loads are typically associated with A-share classes. This sales charge occurs when the investor buys the fund. Front-end loads can range up to approximately 5.75%.

Back-end load – Back-end loads can be associated with B-shares or C-shares. The back-end load is paid when an investor sells the fund. In class B-shares, the back-end load is typically contingent deferred which means it decreases over time.

For more on share class load comparisons see also The ABCs of Mutual Fund Classes.

Other Fund Expenses

Any type of payment to an intermediary for distribution services can be considered a load. Mutual fund investors pay annual operating expenses which are accounted for in the fund’s net asset value. A portion of the fund’s operating expenses may include a 12b-1 fee, also called a level-load. This fee is paid by the mutual fund to the intermediary annually and is quoted as a percent of a share classes assets.

For example, the Principal Equity Income Fund offers investors A, C and I shares. The A-shares have a front-end sales charge of 5.50% and a back-end sales charge of 1.00%. The C-shares have no front-end sales charge and a back-end sales charge of 1.00%. Both share classes have a 12b-1 level-load included with the fund’s operating expenses. The A share class pays a smaller level-load than the C-shares at 0.25% since it offers higher front-end load compensation. The C share class charges a level-load of 1.00%.

Investors may also incur redemption fees. Redemption fees are not paid to intermediaries and therefore are not considered to be a load. These fees are charged on the back-end and help to compensate the fund for transaction costs incurred from short-term investors. Redemption fees may be charged if an investor redeems shares within 30 days to a year from their initial investment.

Sales Load Considerations

Sales charges are commissions agreed upon between mutual fund companies and intermediaries. They are typically charged by full service brokers and mutual fund distributors. Investors can potentially avoid sales loads by buying and selling mutual fund shares through a discount brokerage platform. Oftentimes, investors can also avoid sales loads by investing in mutual funds through a retirement plan.

Most mutual funds offer breakpoints, rights of accumulation and letter of intent options with sales load discounts. These discounts are associated with larger investments in the fund and are outlined in the fund’s prospectus.

  1. Front-End Load

    A commission or sales charge applied at the time of the initial ...
  2. B-Share

    A B-share is a class of shares offered in an open-end mutual ...
  3. Exit Fee

    An exit fee is a fee charged to investors when they redeem shares ...
  4. Contingent Deferred Sales Charge ...

    A fee (sales charge or load) that mutual fund investors pay when ...
  5. Mutual Fund

    Mutual funds combine money from many investors to invest in a ...
  6. A-Share

    An A-share is a share class offered in a family of multi-class ...
Related Articles
  1. Investing

    Selling Mutual Funds: What Happens When You Liquidate?

    Learn about the hidden costs that can be triggered when you redeem mutual fund shares. Even no-load funds have fees and expenses you may not know about.
  2. Investing

    The ABCs of Mutual Fund Classes

    Do you understand how the various types of shares differ? We give you the pros and cons of each.
  3. Investing

    The Lowdown on No-Load Mutual Funds

    No-load mutual funds let you cut out the middleman—and the fees.
  4. Investing

    Why Are ETF Fees Lower Than Mutual Funds?

    Discover all the reasons ETFs typically have lower fees than mutual funds, including their passive management and the absence of load and 12b-1 fees.
  5. Investing

    Trading Mutual Funds For Beginners

    Learn the basics about mutual funds, including the types of strategies available and the different fees they may charge.
  6. Financial Advisor

    Investment Fees: How to Understand Them

    There can be a variety of fees levied when investing. Here's a look at what they are and how to manage them.
  7. Investing

    Consider These Fees When Evaluating Mutual Funds

    The best way to evaluate a mutual fund is by digging a bit deeper into the fees charged.
  8. Investing

    A Guide to Mutual Funds Trading Rules

    Make sure to review this guide on the dos and don'ts of mutual fund trading before you invest, including how trades are executed and which fees to look out for.
  9. Investing

    When To Sell A Mutual Fund

    It can be tempting to sell an underperforming mutual fund, but there are a few key factors to consider before jumping ship.
  1. Is the upfront cost of Class A mutual fund shares worth it?

    Learn about the differences between mutual fund share classes, and discover under what circumstances the Class A shares make ... Read Answer >>
  2. Are Class A mutual funds a better choice for long-term investments or short-term ...

    Understand why A-shares make better long-term investments than short-term investments and how annual expenses of A-shares ... Read Answer >>
  3. Where do I look for fees that I am charged on investments? What are those fees called?

    The fees and expenses charged for investments vary. The fees usually depend on the type of investment and the investment ... Read Answer >>
Hot Definitions
  1. Entrepreneur

    An Entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture. ...
  2. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  3. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  4. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
  5. Income Statement

    A financial statement that measures a company's financial performance over a specific accounting period. Financial performance ...
  6. Leverage Ratio

    A leverage ratio is any one of several financial measurements that look at how much capital comes in the form of debt, or ...
Trading Center