Load Fund

A load fund is a mutual fund that charges a sales fee, or "load," to investors either when they purchase shares (front-end load) or when they sell shares (back-end load). The load is typically used to compensate brokers or financial advisors who sell the fund. Front-end loads are deducted from the initial investment, while back-end loads are charged when investors redeem their shares. Load funds are common in the mutual fund industry, but they can reduce overall returns due to the associated fees.

Example

An investor purchases shares in a mutual fund with a front-end load of 5%, meaning 5% of their initial investment is deducted as a sales fee.