A load fee is a sales commission or charge, paid when buying or selling shares of certain mutual funds. Loads are compensation for financial advisors, brokers, or other intermediaries who sell the fund to investors. There are several types of loads: front-end loads are charged when you purchase shares (typically 3-5.75% of your investment), back-end loads (also called deferred sales charges) are assessed when you sell shares (often starting at 5-6% and declining each year you hold the fund), and level loads charge an ongoing annual fee (usually around 1%). Some funds also have multiple share classes with different load structures—Class A shares typically have front-end loads, Class B shares have back-end loads, and Class C shares have level loads.

For example, if you invest $10,000 in a fund with a 5% front-end load, $500 goes immediately to the salesperson or advisor, and only $9,500 actually gets invested in the fund. This creates a significant performance handicap from day one. The mutual fund industry has increasingly moved toward "no-load" funds, which don't charge these sales commissions, as research consistently shows that load funds don't outperform no-load funds enough to justify the extra cost. The primary argument for load funds is that the commission compensates advisors who provide valuable financial planning services, but many investors find better value in no-load funds combined with fee-only financial advisors who charge transparent hourly rates or flat fees. Detailed information in the fund’s prospectus on it’s fees and expenses, objectives and strategy, performance history, risks, management team, and other details.