Front-Load Fund

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Front-Load Fund

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

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The commission charged on a front load fund can vary up to nine percent of the amount invested, and can be redeemed at any time at no charge.

Pool of savings: mutual funds

Fund companies are pursuing new T shares, or "transaction" shares, while others are issuing more traditional front load funds. The transaction share class has no set definition and can vary from fund to fund.