Sales load
A sales load is a commission charged when an investor buys or sells shares of a , paid to the or financial professional who sold the fund, or to the itself. It exists specifically in what the calls load funds, and that charge no such commission are described as no-load funds.
There are two main forms. A front-end load is deducted immediately from the amount invested at the time of purchase, so an investor putting in a set amount of money actually has a smaller amount put to work after the load is subtracted. A back-end load, also called a deferred charge, is instead charged when shares are sold, and typically declines the longer the shares are held, eventually disappearing entirely after a set number of years, which is meant to reward and encourage longer holding periods.
Sales loads are separate from a fund's ongoing and any , both of which continue to apply every year regardless of the load structure. Because and are generally no-load and typically carry lower ongoing costs as well, the extra cost of a load fund needs to be justified by something the load fund actually provides, such as the of a specific advisor, rather than being paid simply as an unavoidable cost of investing.