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In around two minutes you will know what is a Front-End Load. You will get both professional definition and easy explanation. No intro, no outro, straight to the point.

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Front-End Load is a commission or a sales charge applied at the initial purchase of an investment.

This term is usually applied to mutual funds and can also be back-end load, or no-load.

And if you are not sure what they mean, along with mutual fund definition, feel free to watch my other videos.

Imagine, you want to invest your money through a mutual fund.

You have $10,000 to do so. If this fund has a front-end load commission of 3%, it means that 3% of your $10,000 will be deducted immediately.

These $300 dollars go towards mutual fund as a payment for their service.

And the rest $9,700 is deposited in your account.

From there, your money starts growing unimpeded. Meaning that there are no more additional payments except annual management fees.

Some funds offer lower front-end load commission payments if you deposit larger amounts of money.

For example, if you deposit $50,000, your commission will be reduced from 3% to 2%.

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