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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

front-end load

See load.
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.

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
Traditional A shares purchased through a broker include an immediate fee called a front-end load (expressed as a percentage of the purchase) as well as management fees and ongoing fees for distribution expenses, called 12b-1 fees, Morningstar explained in its research.
Summary statistics for front-end loads appear in Panel B of Table 2.
One class might, for instance, involve a front-end load but no 12b-1 fee.
Also note that, when compared to these alternatives, the option that combines a lower front-end load and a moderate 12b-1 fee is not a suitable option over any of the investment horizons.
This premium, or "front-end load," covers, where applicable, the underwriter's cost, the broker's commission, and other sales and promotional expenses incurred by the fund.(5)
Adopting the "T" share class would, he said, "cause some negative revenue impact to [brokerage firms] and to advisors, though the figure is less than what the headline differences in front-end loads would suggest."
* use of back-end loads (surrender charges) that phase out over time rather than the front-end loads typical of other types of policies;
In the United Kingdom, where corporate and non-corporate mutual funds exist side-by-side, mutual funds organized as corporations charge significantly lower front-end loads and annual management fees than mutual funds not organized as corporations, after controlling for other factors.
Schott Stevens also stated that investors' actual experience with broker-sold funds "contradicts" DOL's claims.Publicly available data demonstrate that, contrary to DOL's claims, "investors who own funds that are sold with front-end loads during the years 2007 to 2013 actually have concentrated their assets in funds that outperform -- not underperform -- other comparable funds," according to Schott Stevens.
The vast majority of Wharton MBA students were unfamiliar with concepts such as expense ratios and front-end loads, and even when provided with fact sheets about such fees, only 6% of the students chose to invest in minimum-fee index funds.
The ICI claimed that "[t]he substitution of 12b-1 fees for front-end loads contributed significantly to the substantial reduction over the past two decades in the cost of purchasing bond and equity funds." (224) Like virtually all of Rule 12b-1's folklore, however, on close inspection this contention fails.
You go from A-shares in a mutual fund with front-end loads and expense ratios and put it in an ETF pipe instead, which results in substantial cost savings for the end investor."