The National Directory of Certified Public Accountants

Ask A CPA - Investments & Financial Planning

In Relation To Mutual Funds , What Is A Back End Loan Fund ?

A Back-end loan fund is a mutual fund that charges investors a fee to sell or redeem shares. The fee ranges from 4% to 6%. Some back-end load funds impose a full commission if the shares are redeemed within a designated time such as one year. The commission decreases the longer the investor holds the shares. The formal name for the back-end load is the contingent deferred sales charge.

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