Definition of Back-end load:
A back-end load is a fee paid by investors when selling mutual fund shares, and it is expressed as a percentage of the value of the fund's shares. A back-end load can be a flat fee or gradually decrease over time, usually within five to ten years. In the latter case, the percentage is highest in the first year and falls until it drops to zero.
Fee charged by mutual funds (unit trusts) to shareholders (unit holders) who sell their shares (units) before the prescribed period of unit-holding (usually eight years) is over. This fee declines with every year of shareholding and reaches zero on the last day of the prescribed period. See also front end load.
A contingent deferred sales charge is a type of back-end load that depends on the holding period. Back-end loads are also known as back-end sales charges. Another term for a back-end load is an exit fee.
How to use Back-end load in a sentence?
- Unlike front-end loads, investors can often avoid back-end load fees by holding the fund for five to ten years.
- In all cases, the load is paid to a financial intermediary and is not included in a fund's operating expenses.
- A back-end load is a fee paid by investors when selling mutual fund shares, and it is expressed as a percentage of the value of the fund's shares.
- Exchange-traded funds (ETFs) and no-load mutual funds are widely available and do not have back-end loads.
Meaning of Back-end load & Back-end load Definition