A load mutual fund comes with a sales charge or commission. To compensate a sales intermediary (ex: a broker, financial planner, investment advisor) for their knowledge and time in choosing a suitable fund for the investor, the fund investor will pay the load. The load is either paid prior to the time of purchase (front-end load), or when the shares are sold (back-end load), or as long as the fund is in possession by the investor (level-load).
To be considered a “no-load” fund, the fund will limit its level load to no more than 0.25% (the maximum is 1%), it will be located in its marketing literature.
Front-end and back-end loads are neither part of a mutual fund’s operating expenses, however level-loads, called 12b-1 fees will be included. The annals show that the performance of load and no-load funds are very much alike.