Investments, tenth edition

  Front-End Load   

A front-end load is a commission or sales charge paid when you 

purchase the shares. These charges, which are used primarily to pay the brokers who sell 

the funds, may not exceed 8.5%, but in practice they are rarely higher than 6%.  Low-load 

funds  have loads that range up to 3% of invested funds.  No-load funds  have no front-end 

sales charges. Loads effectively reduce the amount of money invested. For example, each 

$1,000 paid for a fund with a 6% load results in a sales charge of $60 and fund investment 

of only $940. You need cumulative returns of 6.4% of your net investment (60/940  5  .064) 

just to break even.