A Back-End Load (sometimes called “contingent deferred sales charge”) refers to a sales fee that is paid by an investor when they sell mutual fund shares during a specific time period. Back-End Loads are most commonly associated with mutual fund B shares, but are also possible with annuities, life insurance policies, and some limited partnerships. The fee is designed for two purposes: to discourage early withdrawal of assets and frequent trading (these activities would create a need for massive capital on hand), and to compensate the broker for his expertise in choosing funds. As with all costs associated with mutual funds, the Back-End Load and its term must be disclosed in the fund’s prospectus. The amount of the fee is equal to a percentage of the value of the share being sold; typically ranging from 5% to 7%. The time-frame of the Back-End Load generally ranges from five to ten years and the percentage decreases incrementally with each year that the share is held. Selling a share within the first year will, of course, carry the highest fee and after the specified holding period expires, the percentage of the Back-End Load will drop to 0%. In summary, for every year that the share is held, the cost of selling the share will be lowered. Back-End Loads and other types of load fees are usually waived for employer-sponsored plans.