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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Sales Charge, Sales Load

Definition:

The amounts that mutual fund companies and/or their distribution companies or partners tack on in addition to the NAV price to pay the sales force for having sold the fund. 

Bonds generally operate in two modes: either they have a high sales charge or load and have low annual fees, or they have low or no load and high annual fees. Which should you buy? The answer depends on old time duration. If you are going to trade funds on a regular short-term basis, then no-load funds are probably just fine. But do the math on a no-load fund charging 2% per year versus a load fund charging half a percent per year. If you paid a 5% commission to buy a load fund, you make back all of your commission and then some if you have held the fund for years or longer.

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