Definition
Load funds charge sales commissions, either upfront (front-end load, typically 3-5.75%) or when selling (back-end load). These fees compensate brokers and advisors. No-load funds don't charge sales commissions. The trend has moved toward no-load funds and lower costs, though loads still exist in some advisor-sold products.
Formula
Investment Amount = Purchase Amount × (1 - Front-End Load%)
Example
A $10,000 investment in a 5% front-end load fund means only $9,500 is actually invested; $500 goes to the sales charge.
FAQ
What is Load Fund?
A mutual fund that charges a sales commission when buying or selling.
How do you calculate Load Fund?
A common formula for Load Fund is: Investment Amount = Purchase Amount × (1 - Front-End Load%)
Why is Load Fund important?
Load Fund helps investors evaluate fund types and make more informed decisions.