Back-End Load is another name for
Deferred Sales Charge, or
DSC. It's a kind of
commission charged on
mutual funds. Purchasers of back-end funds pay no initial commission, like with
front end funds, but must commit to staying in the fund family for many years. They are free to redeem their holdings in the fund at any time, but if they do they are charged a percentage as commission according to an elaborate schedule. Generally, it starts out as 5 or 6% (ouch!) for the first year, gradually lowering until after 6 years (the exact time period depends on the company) it is 0%. There is usually no DSC fee charged for switching to another back-end fund in the same fund family.
Other types of mutual fund commission include Front-End Load (FE), which is also called Initial Sales Charge (ISC); and No Load (NL).
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