Definition of Back End Load

When an investor exits or sells a mutual fund, they need to pay a certain amount of commission or fee which is called as Back End Load. This is also known as an exit load. It is not applicable to all fund houses. Usually, it is charged by a few fund houses only. However, it is a cost that is to be borne by the investor.

Points to Remember:

• The back end load is charged in order to reduce the number of withdrawals.
• The fee is a percentage of the holdings being sold by the investor.