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Back-End Load

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Financial Dictionary

Back-End Load

A fee an investor pays when selling a mutual fund within a certain number of years, usually seven.

Investopedia Commentary

Sometimes in exchange for paying no fees up front, the investor pays an annual fee for marketing and managing that is higher than the fees charged for a front-load fund.

Back-end mutual funds are okay if you plan on investing for the long-term otherwise, you'll pay high commission to withdraw early. Remember that almost all mutual funds charge an annual administration fee that is automatically withdrawn from your account, so back-end funds aren't completely free.

In the U.K., a Back-End Load is called an "Exit Charge."

Related Links

Mutual Fund Basics Tutorial
Digging Deeper: The Mutual Fund Prospectus

See also: Exchange Privilege, Front-End Load, Load Fund, Mutual Fund, No-load

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Financial Dictionary

back-end load

See deferred sales charge.

Wall Street Words: An A to Z Guide to Investment Terms by David L. Scott.
Copyright © 2003. Published by Houghton Mifflin.
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