back-end load


Also found in: Dictionary.

Contingent Deferred Sales Charge

The formal name for the load in a back-end load fund. A CDSC is the fee paid when a shareholder sells shares in a mutual fund within a certain number of years. That is, when an investor initially buys a share in a back-end load fund, he/she agrees to pay a third party, usually a financial institution or broker, a certain percentage of the share's value if he/she decides to sell it within five to 10 years, depending on the specific nature of the agreement. The CDSC usually declines by the year until the maximum number of years is reached. See also: B-share.

back-end load

Back-end load.

Some mutual funds impose a back-end load, or a contingent deferred sales charge, if you sell shares in the fund during the first six or seven years after you purchase them.

The charge is a percentage of the value of the assets you're selling. The percentage typically declines each year the charge applies and then is dropped.

However, the annual asset-based management fee is higher on back-end load funds, also known as Class B shares, than on front-end load funds, where you pay the sales charge at the time you purchase.

References in periodicals archive ?
Some providers aggressively pursue the small business market and waive all front- and back-end loads when annual contributions are expected to be greater than a minimum amount ($50,000).
B shares have back-end loads or contingent deferred sales charges (CDSC).
The second major type of load a fund can impose is a back-end load.
Most back-end load fees apply if a fund holder sells shares within five years.
use of back-end loads (surrender charges) that phase out over time rather than the front-end loads typical of other types of policies;
Through Mutual Solutions, front-end and back-end loads of recommended funds are waived.
Back-end loads or contingent deferred sales loads (CDSL) are sometimes used in junction with 12b-1 fees as an alternative to front-end sales loads (12b-1 fees are those that can be assessed against fund assets to recover distribution expenses of the fund).
Some insurance products--particularly universal-life policies--carry surrender charges or back-end loads.
In addition, each participant or beneficiary must be provided with a statement explaining any fees and expenses that can be charged on an individual basis (as opposed to a plan-wide basis) and that are not reflected in each DIA's total annual operating expenses, such as fees for processing plan loans or qualified domestic relations orders; fees for investment advice; fees for brokerage windows; commissions or front-end or back-end loads or sales charges; and redemption fees.
There are no commissions, front- or back-end loads, or surrender penalties.
Through this fee-based program, front-end and back-end loads of recommended funds are waived.