- Front-End Load
- A commission or sales charge applied at the time of the initial purchase for an investment, usually mutual funds and insurance policies. It is deducted from the investment amount and, as a result, it lowers the size of the investment.
Front-end loads are paid to investment intermediaries (financial planners, brokers, investment advisors) as sales commissions. As such, these sales charges are not part of a mutual fund's operating expenses. It is argued that a load is a cost that investors incur for obtaining an investment intermediary's expertise in selecting appropriate funds for clients. It is a matter of record that load funds do not outperform no-load funds.
Generally, the sales charge on a load mutual fund will be waived if such a fund is included as an investment option in a retirement plan such as a 401(k).
Investment dictionary. Academic. 2012.
Look at other dictionaries:
front-end load — front′ end load′ n. bus (in a mutual fund) a percentage of the first year s payment used for sales commission and future operating expenses Also called front′ load . Etymology: 1960–65 … From formal English to slang
front-end load — A form of sales charge imposed by some mutual funds. A front end load is an initial charge that is deducted from each investment made in the fund. The amount of the charge is usually a percentage of the amount of the investment. See back end load … Financial and business terms
front-end load — ˈ ̷ ̷ ˌ ̷ ̷ noun : the part of the total load taken out of early payments under a contract plan for the periodic purchase of investment company shares * * * /frunt end / the sales commission and other fees taken out of the first year s payment… … Useful english dictionary
front-end load — /frunt end / the sales commission and other fees taken out of the first year s payment under a contractual plan for purchasing shares of a mutual fund (front end load fund) over a period of years. Also called front load. [1960 65] * * * … Universalium
front-end load — The initial charge made by a unit trust, life assurance company, or other investment fund to pay for administration and commission for any introducing agent. The investment made on behalf of the investor is, therefore, the total initial payment… … Accounting dictionary
front-end load — The initial charge made by a unit trust, life assurance company, or other investment fund to pay for administration and commission for any introducing agent. The investment made on behalf of the investor is, therefore, the total initial payment… … Big dictionary of business and management
front-end load — noun Date: 1962 the part of the total commission and expenses taken out of early payments under a contract plan for the periodic purchase of investment company shares … New Collegiate Dictionary
front end load — (Finance) sales commission paid at the time of purchase, commission paid at the beginning of a financial transaction … English contemporary dictionary
front-end load — Loan fee or sales commission paid from the initial funds borrowed … American business jargon
Front-end and back-end — are generalized terms that refer to the initial and the end stages of a process. The front end is responsible for collecting input in various forms from the user and processing it to conform to a specification the back end can use. The connection … Wikipedia