Glossary
Load Fund
A load fund is a mutual fund that charges a sales commission — paid to the broker or agent who sells it — either when shares are bought (front-end load) or sold (back-end load).
A typical front-end load of 5% means $50 of every $1,000 invested goes to the seller before a dollar is invested; some share classes instead charge exit fees that decline over years, plus elevated annual 12b-1 marketing fees. No-load funds charge no sales commission at all.
Why it matters in practice
The load compensates the person recommending the fund, which is the textbook conflict of interest: comparable or identical strategies are widely available without loads, so the charge buys distribution, not performance. Loads are one of the clearest markers distinguishing commission-based sales from fee-only advice — a fee-only fiduciary has no reason to place a client in a load share class.
Related terms: Mutual Fund · Expense Ratio · Fee-Only · Suitability · Index Fund