The longer you intend to hold a fund, the more willing you should be to accept a front-end load charge in exchange for lower annual management and 12(b)-1 fees.

Question

Quizplus · Accepted Answer

This statement is true. Front-end load charges are a one-time fee paid at the time of purchase, so the longer you hold the fund, the more that fee is diluted over time. In contrast, annual management and 12(b)-1 fees are ongoing expenses that are a percentage of your investment each year, so they can add up over time. Therefore, if you plan on holding the fund for a long time, it may be worth paying a front-end load to save on these ongoing fees.

The Longer You Intend to Hold a Fund, the More