ShmoopTube

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Finance a la shmoop... what is a back-end load? ok people there has to be a diaper

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joke in here somewhere doesn't their nappies maybe okay nevermind spoil [Baby boy wearing a nappy]

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sports you people are no fun.. back end load refers to the commission charged

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when an owner of a mutual fund sells their mutual fund shares you know way

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less jokey the back end load is structurally a different type of share

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called a B-share and yes we have an opus video on the term you should check

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it out so why would you choose a back-end load over a front-end load well

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if you pay your commission on a thousand dollars invested to you know start out

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on your mutual fund investing sojourn well you start your compounding there

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within a safe 970 dollars after having paid the three

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percent commission there you compound away on a lower starting nut than you [Front end load calculations]

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would have had you paid your commission at the end the problem well say you held

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the fund 15 years you started with a grand ie not nine seventy because

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there was no commission when you became an owner of the shares of the fun you're

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gonna do the B shares take the back end load and after 15 years that grant

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doubled three times to become two then four then eight grand in value now you

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pay a commission is it three percent still well in some funds it might be so

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then you're paying three percent on eight grand or a total commission of two

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hundred forty dollars instead of the thirty bucks you could have paid upfront

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have you just bitten the bullet in the beginning and bought a shares [A and B share commission value]

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well tons of gimmicks crawl around out there when you're buying mutual funds [Ants crawling through cracks on the floor]

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hoping to get you to pay up for the brokers right? brokers got to live but

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well you just got to understand what you're being sold and some of those

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brokers well they have babies at home and you know they need to pamper them [man holding a diaper]

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with back-end loads

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