mutual fund that charges a sales commission, or load, if the investor disposes or sells shares in the fund. Also called trail commissions. Compare with front-end load.
redemption charge an investor pays when withdrawing money from an investment. Most common in mutual funds and annuities, the back-end load is designed to discourage withdrawals. Back-end loads typically decline for each year that a shareholder remains in a fund. Also called contingent deferred sales load, deferred sales charge, exit fee, redemption charge.
redemption charge an investor pays when withdrawing money from an investment. Most common in mutual funds and annuities, the back-end load is designed to discourage withdrawals. Back-end loads typically decline for each year that a shareholder remains in a fund. For example, if the shareholder sells shares in the first year, a 5% sales charge is levied. The charge is 4% in the second year, 3% in the third year, 2% in the fourth year, 1% in the fifth year, and no fee is charged if shares are sold after the fifth year. Also called contingent deferred sales load, deferred sales charge, exit fee, redemption charge.
