Sales Load

Sales Load refers to a fee charged to an investor when purchasing Shares of a mutual fund or other investment products. This fee is typically expressed as a percentage of the amount invested and is intended to compensate brokers and Financial Advisors for their services.

There are two main types of sales loads:

• Front-End Load: This fee is deducted from the initial investment. For example, if an investor invests $10,000 in a mutual fund with a 5% front-end load, the investor will pay $500, and $9,500 will be invested in the fund.
• Back-End Load: This fee is charged when Shares are sold, often decreasing over time. For instance, a mutual fund might have a 6% back-end load if Shares are sold within the first year, which reduces to 0% after five years.

Sales loads can significantly impact an investor’s Returns, making it important to consider them when choosing investment Options. Some funds, known as no-Load Funds, do not charge any sales load.