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Front end load

• A sales charge or commission paid for an investment at the time of purchase.

• (1) A mutual fund commission or sales fee that is charged at the time shares are purchased. The load is added to the net asset value of the shares when calculating the public offering price. See also back-end load. (2) A system of sales charge for contractual plans that permits up to 50% of the first year's payments to be deducted as a sales charge. Investors have a right to withdraw from the plan, but there are some restrictions if this occurs. See also: Back-End Load.

• Refers to charges which are imposed upon the purchase or acquisition of an investment position. Many times these charges are on a sliding scale. Sometimes, these charges are viewed as impediments for early withdrawals. They are called front-end because they occur at the beginning of the investment process.

 
 Embedded terms in definition
 Asset
Commission
Mutual fund
Net asset value
Net
Position
Public offering
Purchase
Right
Sales charge
Sales
Scale
Shares
Time
 
 Related Terms
 

<< Frn Front fee >>

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