Business, Legal & Accounting Glossary
A charge imposed when investors redeem (sell) shares in mutual funds, which has the effect of discouraging withdrawals. Traditionally, the earlier you redeem, the higher the back-end load. After holding for five years or so, there will usually not be a back-end load. In the UK these charges are known as an exit charge.
A back-end load is a sales charge or a commission paid when an investor sells an investment. A back-end load may also be known as a redemption fee or a deferred sales charge. In England, a back-end load fee is sometimes called an exit charge. A back-end load is often added to a mutual fund or to some annuities. A back-end load is designed to discourage investors from making withdrawals from a fund or annuity, although oftentimes back-end load fees will be waived if an investor holds an investment for a certain number of years. A back-end load can be a sales incentive for an investment, as many investors baulk at paying fees up-front but aren’t as concerned about fees paid down the road.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Back-End Load are sourced/syndicated and enhanced from:
This glossary post was last updated: 20th March, 2020 | 1 Views.