Back-End Load

What does it mean?
A fee an investor pays when selling a mutual fund within a certain number of years, usually seven.

In Other Words...
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 Remember that almost all mutual funds charge an annual administration fee that is automatically withdrawn from your account, so back-end funds aren't completely free.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 Fees - An article by the Securities and Exchange Commission on fees and loads involved with mutual funds.

Mutual Fund Basics Tutorial - Learn about the basics--and the pitfalls!--of investing in mutual funds.

Related Terms
Exchange Privilege | Front-End Load | Load Fund | Mutual Fund | No-load

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