Redemption fee

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Redemption fee

A fee some mutual funds charge when an investor sells shares within a specified short period of time.

Redemption Fee

A fee that some mutual funds assess when a shareholder redeems shares from the fund during a certain, usually brief period of time after purchase. It may be a flat fee or a percentage of the value of the shares redeemed. Mutual funds charge redemption fees to discourage new investors from withdrawing from the mutual fund if the fund's net asset value drops unexpectedly.

Redemption fee.

Some open-end mutual funds impose a redemption fee when you sell shares in the fund, often during a specific, and sometimes brief, period of time after you purchase those shares.

The fee is usually a percentage of the value of the shares you sell, but it may also be a flat fee, or fixed amount.

The purpose of the fee is to prevent large-scale withdrawals from the fund in response to changes in the financial markets, which might require the fund manager to sell holdings at a loss in order to meet the fund's obligation to buy back your shares.

References in periodicals archive ?
To achieve this, it is offering a opportunity to subscribe to the Fund, with no monthly subscription or redemption fees.
The loan is exempt from credit handling fees and early redemption fees.
The three lenders have agreed to waive redemption fees totalling $151,000 (PS94,000) and to write off 5% of the money due to them.
It is based on Morningstar total return, which includes both income and capital gains or losses and is not adjusted for sales charges or redemption fees.
Delta Air Lines (NYSE:DAL) announced today that it is to eliminate award ticket redemption fees for SkyMiles frequent flyer members, effective immediately.
In 2003, none of the main lenders charged more than pounds 200 in standard redemption fees, but more than two-thirds do today.
In addition, the SEC has proposed a rule, Mandatory Redemption Fees for Redeemable Fund Securities, requiring, with certain exceptions, that funds require all shareholders to hold fund shares for five days or pay a 2% redemption fee.
For that reason, it is important to check the redemption fees you pay for getting out of your mortgage early.
Make sure to include all your expenses in calculating the cost basis - reinvested dividends, sales load, redemption fees, brokerage fees and the like.
Nationwide Funds Group today announced that it will eliminate all redemption fees on its retail and retirement plan mutual funds, effective Aug.
Redemption fees: Many funds charge redemption fees if you leave before a specified number of years.