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Letter Of Intent
(LOI) A signed document by an investor purchasing shares in a front-loaded mutual fund that will allow the investor to achieve a lower sales charge (see sales load) immediately, even if the investor has not actually purchased enough shares to qualify for the reduced charge. The LOI indicates the investor's intent to buy additional shares in the future, but note that it does not require the investor to do so. To ensure that the investor actually follows through, the mutual fund company will hold some of the shares in escrow and if the shareholder ultimately fails to purchase enough shares, it will sell those escrowed shares. End result: the mutual fund company is not getting screwed in this arrangement.