Redemption fee

(redirected from Early Redemption Fees)

Redemption fee

A fee some mutual funds charge when an investor sells shares within a specified short period of time.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Redemption Fee

A fee that some mutual funds assess when a shareholder redeems shares from the fund during a certain, usually brief period of time after purchase. It may be a flat fee or a percentage of the value of the shares redeemed. Mutual funds charge redemption fees to discourage new investors from withdrawing from the mutual fund if the fund's net asset value drops unexpectedly.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Redemption fee.

Some open-end mutual funds impose a redemption fee when you sell shares in the fund, often during a specific, and sometimes brief, period of time after you purchase those shares.

The fee is usually a percentage of the value of the shares you sell, but it may also be a flat fee, or fixed amount.

The purpose of the fee is to prevent large-scale withdrawals from the fund in response to changes in the financial markets, which might require the fund manager to sell holdings at a loss in order to meet the fund's obligation to buy back your shares.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
In addition to commission-free trades, the OneSource ETF platform has no enrollment requirements nor early redemption fees, which Schwab says differentiates its platform from other commission-free ETF offerings.
If you want to repay a loan off earlier, there will usually be early redemption fees, which will be a percentage of the outstanding balance.
After additionally factoring in $5.9 million in pretax early redemption fees in the prior-year period, pretax earnings soared 25.3% to $186.2 million.
The loan is exempt from credit handling fees and early redemption fees.
Following a Central Bank regulation issued early this year, most banks have imposed uniform early redemption fees on personal loans and car loans.
In addition, another lender is currently writing to mortgage clients offering to waive early redemption fees in an effort to get them to remortgage elsewhere!
Under the plans, B&B will cease new lending and offer incentives to existing customers to move their mortgages elsewhere through measures such as waiving early redemption fees.
You then have to rely on the increasing value of the property that will one day be sold, repay the loan (without any early redemption fees) and you would hope to be left with a profit.
Louise Cumming, at price comparison website, said: "It is ludicrous to tie into a contract for this time - though there are no early redemption fees after ten years.
Says Louise Cumming, at price comparison website "It is ludicrous to tie into a contract for this time - though there are no early redemption fees after 10 years.
CDs and other fixed income investments usually have early redemption fees and market fluctuation risks if not held to maturity.

Full browser ?