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Trading and Investment Terminology

Sales Charge

The sales charge is a fee paid to purchase or sell a specific investment. 

It is expressed as a percentage of the amount invested. 

The term is most often used when discussing mutual funds.


A sales charge, also known as a "Back-end Load," investors pay when they redeem (sell) mutual fund shares. Funds generally use these to compensate brokers.


In mutual funds, the sales charge is typically called a 'load', which may be charged up-front, at the time of sale, or some other arrangement.

Types of Sales Charges




Suppose that an investor puts $10,000 in the XYZ mutual fund with a front-end load of 5.75% for small investors. 

The investor’s actual investment in the fund after the sales charge would be $9,425. 

However, sales charges are only one of several types of fund fees that investors can reduce or eliminate.