back-end load


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Related to back-end load: 12b-1 fee, Contingent deferred sales charge, Redemption fee, Front End Load, Level Load Fund

Contingent Deferred Sales Charge

The formal name for the load in a back-end load fund. A CDSC is the fee paid when a shareholder sells shares in a mutual fund within a certain number of years. That is, when an investor initially buys a share in a back-end load fund, he/she agrees to pay a third party, usually a financial institution or broker, a certain percentage of the share's value if he/she decides to sell it within five to 10 years, depending on the specific nature of the agreement. The CDSC usually declines by the year until the maximum number of years is reached. See also: B-share.

back-end load

Back-end load.

Some mutual funds impose a back-end load, or a contingent deferred sales charge, if you sell shares in the fund during the first six or seven years after you purchase them.

The charge is a percentage of the value of the assets you're selling. The percentage typically declines each year the charge applies and then is dropped.

However, the annual asset-based management fee is higher on back-end load funds, also known as Class B shares, than on front-end load funds, where you pay the sales charge at the time you purchase.

References in periodicals archive ?
Some providers aggressively pursue the small business market and waive all front- and back-end loads when annual contributions are expected to be greater than a minimum amount ($50,000).
The second major type of load a fund can impose is a back-end load.
Through Mutual Solutions, front-end and back-end loads of recommended funds are waived.
Back-end loads or contingent deferred sales loads (CDSL) are sometimes used in junction with 12b-1 fees as an alternative to front-end sales loads (12b-1 fees are those that can be assessed against fund assets to recover distribution expenses of the fund).
Some insurance products--particularly universal-life policies--carry surrender charges or back-end loads.
There are no commissions, front- or back-end loads, or surrender penalties.
Through this fee-based program, front-end and back-end loads of recommended funds are waived.
Many in the mutual fund industry feel both front- and back-end loads keep investors disciplined, and prevent them from shuffling money in and out of the market.
explains the differences between front-end and back-end loads when investing in mutual funds.
Also, most annuity contracts have stiff back-end loads (commissions due if you cash in the investment in a specified time period).
But watch out for back-end loads with even the most enticing no-load funds.