Front-end load


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Front-end load

The fee applied to an investment at the time of initial purchase, e.g., on a mutual fund purchased from a broker or mutual fund company.

Front-End Load

A sales fee in a mutual fund that one pays when one buys shares in the fund. That is, when an investor buys a share in a mutual fund with a front-end loan, he/she agrees to pay a third party, usually a financial institution or broker, a certain percentage of the share's value. Unlike back-end load, the shareholder does not pay the fee upon sale, but rather upon purchase. A share in a mutual fund with a front-end load is called an A-share. See also: B-Share, C-Share, No-Load Fund, CDSC.

front-end load

See load.

Front-end load.

The load, or sales charge, that you pay when you purchase shares of a mutual fund or annuity is called a front-end load. Some mutual funds identify shares purchased with a front-end load as Class A shares.

The drawback of a front-end load is that a portion of your investment pays the sales charge rather than being invested. However, the annual asset-based fees on Class A shares tend to be lower than on shares with back-end or level loads.

In addition, if you pay a front-end load, you may qualify for breakpoints, or reduced sales charges, if the assets in your account reach a certain milestone, such as $25,000.

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on management fees, front-end loads, fund and family size, date of
Fund B has a high front-end load but a moderate expense ratio.
Also note that, when compared to these alternatives, the option that combines a lower front-end load and a moderate 12b-1 fee is not a suitable option over any of the investment horizons.
In the United Kingdom, where corporate and non-corporate mutual funds exist side-by-side, mutual funds organized as corporations charge significantly lower front-end loads and annual management fees than mutual funds not organized as corporations, after controlling for other factors.
Purchasing a true no-load mutual fund, however, permits the mutual fund shareholder to avoid both a front-end load and a surrender charge.
Class A shares, for example, typically bear a front-end load with various "break-points," (113) with or without an ongoing 12b-1 fee.
Investors pay no front-end load for subscription on the Frankfurt Stock Exchange nor are any exchange fees charged.
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2 Royalties, Fees and Applicable Front-End Load Terms 10
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Following this directive, the SEC, NASD and NYSE issued a report in March of 2003 detailing their findings that nearly one in three mutual fund transactions in front-end load mutual funds that appeared eligible for a breakpoint discount did not receive one.