Front-end load

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Front-end load

The fee applied to an investment at the time of initial purchase, e.g., on a mutual fund purchased from a broker or mutual fund company.

Front-End Load

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, C-Share, No-Load Fund, CDSC.

front-end load

See load.

Front-end load.

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.

References in periodicals archive ?
Unfortunately, in the 1970s and 1980s, insured pension contracts tended to be set up with high front-end charges. Stakeholder pensions, although they have not been a complete success, have had a positive impact in reducing charges for personal pensions.
As Stephen discovered, front-end charges mean you will get back little more than you've paid in so far - sometimes a lot less.
Or else, jump in and risk being tied up with high front-end charges and early redemption penalty clauses.
There are no heavy front-end charges or commissions or hefty penalties for early withdrawal.
Earlier this week the dreaded Financial Services Authority warned those whom it might concern to stop selling pensions with heavy front-end charges to anyone who may turn out to be better off switching to one of the Government's new stakeholder pensions when these finally materialise.