Sales charge


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Sales charge

The fee charged by a mutual fund at purchase of shares, usually payable as a commission to a marketing agent, such as a financial adviser, who is thus compensated for assistance to a purchaser. It represents the difference, if any, between the share purchase price and the share net asset value.

Load

A sales charge or commission one pays for purchasing a mutual fund. The charge is paid to the person(s) who sold the investor shares in the fund. There are three types of load. A front-end load occurs when the shareholder pays the fee when buying into the fund. A back-end load means that the investor pays when selling his/her shares. Finally, an investor with a level-load fund pays periodically throughout his/her time as a shareholder. Studies have shown that load funds perform neither better nor worse than no-load funds.

Sales charge.

A sales charge is the fee you pay to buy shares of a load mutual fund or other investment purchased through a financial professional.

The charge is typically figured as a percentage of the amount you invest. As the size of your investment increases, the rate at which you pay the sales charge may decrease.

Each dollar amount at which there is a corresponding reduction in the charge is known as a breakpoint. For example, the rate may drop from 4.5% to 4.25% with an investment of $25,000.

The sales charge on a mutual fund may be imposed as a front-end load when you buy (also known as Class A shares), as a back-end load when you sell (also known as Class B shares), or as a level load each year you own the fund (also known as Class C shares).

References in periodicals archive ?
A breakpoint discount is a reduced sales charge based on the dollar amount of the purchase - the higher the amount the greater the discount.
Mutual funds offer several classes of shares, each with different sales charges and fees.
For investments of less than USD 100,000 the sales charge will drop from 4.5% to 2.5%, and for investments of between USD 100,000 to USD 249,999, the fee will drop from 3.75 % to 2%.
Among recent enforcement actions by the Financial Industry Regulatory Authority were the censure and fine of two firms for failing to appropriately discount sales charges of unit investment trusts.
As FINRA explains, Class A shares typically have lower fees than Class B and C shares, but charge customers an initial sales charge. FINRA says that many mutual funds waive their upfront sales charges on Class A shares for certain types of retirement accounts, and some waive these charges for charities.
As FINRA explains, Class A shares typically have lower fees than Class B and C shares, but charge customers an initial sales charge. Many mutual funds waive their upfront sales charges on Class A shares for certain types of retirement accounts, and some waive these charges for charities.
The Financial Industry Regulatory Authority (FINRA) announced the final results of its mutual fund waiver initiative--the agency's aggressive multiyear effort to ensure member firms appropriately credit clients with the sales charge waivers due to them.
Such multiple charges include: a second popular five per cent Cargo Sales charge, five per cent Value Added Tax (VAT), Passenger Service Charge of N1000 per ticket on local routes, Charter Sales Charge, Aircraft Inspection Fees, Simulator Inspection Fees, Landing Charges, Parking Charges and Terminal Navigational Charge.
Forte also cites Etsy's potential to improve mobile conversion and the latest pricing power evidence from a sales charge increase to 5% as some of the company's catalysts.
"Many 'record convention' vinyl sales charge $5 to $20 for admission, so the idea of folks donating a few nonperishable food items to help their neighbors was an easy sell for me and my friends," Schart said.
The Securities and Exchange Commission today announced that a Minnesota-based broker-dealer and investment adviser has agreed to settle charges for recommending and selling higher-fee mutual fund shares to retail retirement account customers and for failing to provide sales charge waivers.