Loads are typically described as front-end or back-end. A front-end load is an expense incurred at the purchase of the fund. For example, a 3 percent front-end load on a $5,000 investment means that $150 goes toward the sales fee, and $4,850 is invested.
Back-end loads are deferred sales charges, or redemption charges, that go into effect when a fund is sold before a certain time. Back-end loads tend to decrease the longer you wait to sell the fund. According to Morningstar, in the first year back-end loads start at around 5 percent to 7 percent. They go down to 0 percent in the next five to seven years.
Not all mutual funds come with these kinds of expenses. So, if possible, look for no-load funds to save.
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