Front-end load (redirected from Front End Fees)
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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
, No-Load Fund
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
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.