| load fund A mutual fund with shares sold at a price that includes a sales charge  typically 4 to 9.3% of the net amount invested. Thus, load funds are sold at a price exceeding net asset value, but they are redeemed at net asset value. There is no reason to expect an investment company with a sales charge to outperform one without a sales charge. See also load, low-load fund, no-load fund.Case Study Mutual fund distributors sometimes offer two, three, or four classes of shares for the same fund. Fund classes differ with regard to the fees charged to investors who purchase and own the shares. Class A shares typically entail a sales charge that ranges between 3% and 6%, while class B shares for the same fund entail a higher annual fee plus a redemption charge, or exit fee, in place of an initial sales charge. The redemption fee generally declines the longer shares are held before being redeemed. A third class of mutual fund shares may have no sales or redemption charge, but entail a higher annual fee. One major brokerage firm offers an aggressive growth fund with the following charges:
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Load fund. Some mutual funds charge a load, or sales commission, when you buy or sell shares or, in some cases, each year you own the fund. The charge is generally figured as a percentage of your investment amount.
Most load funds are sold by brokers or other investment professionals. The sales charge compensates them for their time.
In contrast, no-load funds, which don't have sales charges but may levy other fees, are usually sold directly to the public by the investment company that offers the fund. Some companies offer both load and no-load versions of the same fund.
What Does Load Fund Mean?
A mutual fund that charges a sales commission. The fund investor pays the load, which goes toward compensating a sales intermediary (broker, financial planner, investment advisor, etc.) for his or her time and expertise in selecting an appropriate fund for the investor.
Investopedia explains Load Fund
The load is paid up front at the time of purchase (front-end load), when the shares are sold (back-end load), or as long as the fund is held by the investor (level-load). If a fund limits its load to no more than 0.25% (the maximum is 1%), it can call itself a no-load fund in its marketing literature. Front-end and back-end loads are not part of a mutual fund's operating expenses, but level-loads, called 12b-1 fees, are included. Data shows that the performance of load and no-load funds is similar.
Related Terms:
• Breakpoint
• Front-End Load
• Mutual Fund
• Net Asset Value—NAV
• No-Load Fund
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