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Finance Glossary

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Sales Charge, Sales Load


Mutual funds ain't free, no matter what the ads say.

When you invest in a mutual fund, you pay a commission (a load) or an annual fee. The money goes to the people who sell and manage the fund. The money that's collected from you to pay those folks is known as the sales charge or sales load.

You could be paying one of a few ways. You could have a straight-up sales charge or a high annual fee (it's usually one or the other). A good rule of thumb is to think about how long you'll have the fund: If you plan on holding, choose low annual fees and you'll save in the long run. If you'll sell soonish, look for no loads or low loads.