Listen to a Business English Dialogue About Contingent deferred sales load
Morgan: Hey Thomas, have you heard about contingent deferred sales loads in investing?
Thomas: No, I haven’t. What are they exactly?
Morgan: Contingent deferred sales loads are fees investors might have to pay when selling certain mutual funds, usually within a specific time frame after purchasing them.
Thomas: Oh, I see. How do these fees work?
Morgan: Well, if you sell your mutual fund shares within the set period, you might have to pay a percentage of the amount you’re redeeming as a fee.
Thomas: That sounds tricky. Are there any ways to avoid paying these fees?
Morgan: Some mutual funds waive the contingent deferred sales load if you hold onto your shares for a certain period, usually a few years.
Thomas: I see. Do these fees vary depending on the mutual fund?
Morgan: Yes, they can vary in percentage and duration, so it’s essential to carefully read the fund’s prospectus to understand the specific terms.
Thomas: Got it. Are there any downsides to investing in funds with contingent deferred sales loads?
Morgan: Well, these fees can eat into your investment returns if you need to sell your shares earlier than expected, so it’s important to consider them when making investment decisions.
Thomas: I understand. How do these fees compare to other types of fees in mutual funds?
Morgan: Contingent deferred sales loads are different from other fees like expense ratios or front-end loads, which are typically charged when you initially invest in the fund.
Thomas: Thanks for explaining, Morgan. It’s crucial to be aware of all the fees associated with investing.
Morgan: Absolutely, Thomas. Being informed about fees helps you make better investment choices and maximize your returns over time.