Question: |
What is fund sales charge (load) on purchases? |
Category: |
Business & Finance > Investing |
Keywords: |
mutual fund, front-end, sales charge, load, purchases |
Type: |
what |
Rating: (0 ratings) Views: 472 Discussions: 0 In Watch Lists: 1 |
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Answer:
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The category "Sales Charge (Load) on Purchases" in a fund fee table includes sales loads that investors pay when they purchase fund shares (also known as "front-end sales loads"). The key point to keep in mind about a front-end sales load is it reduces the amount available to purchase fund shares. For example, if an investor writes a $10,000 check to a fund for the purchase of fund shares, and the fund has a 5% front-end sales load, the total amount of the sales load will be $500. The $500 sales load is first deducted from the $10,000 check (and typically paid to a selling broker), and assuming no other front-end fees, the remaining $9,500 is used to purchase fund shares for the investor.
Source: SEC
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