back-end load

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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 ?
But Edwards said none of the investment clients he interviewed as part of the investigation said Kiefer had explained to them the advantages of front-end loading versus back-end loading.
We beat our annual targets despite fourth quarter results that were impacted by some timing-related and unusual items, such as the back-end loading of sustaining capital expenditures and lost business due to hurricanes, and by some general economic factors, such as lower crude oil prices and a weakened Canadian dollar.'
If an employer converts the traditional defined-benefit plan to a cash-balance plan, say after only working 10 to 15 years, that employee will lose significant future benefits because of the back-end loading. These employees will not like the conversion; they would have been better off if they had started with a cash-balance plan in the first place.