Front-Load Fund

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.
References in periodicals archive ?
For example, when investing long-term, other things being equal, a 4% front-load fund that charges a .5% management fee may be a better choice than a 2% front-load fund that charges a 1% management fee.
On the other hand, if the investment is for an IRA account, then a front-load fund may be the best alternative.
Assume $10,000 is invested in a 5% front-load fund. After the load ($500) is deducted, the initial investment is $9,500 and after a year the investment is worth $19,000.
Front-load funds represented $1.79 trillion or 27.5% of the $6.51 trillion in total assets in open-end funds, according to data provided by Morningstar Inc., Chicago (see accompanying chart).