Front-End Investment Load

D

Between the full-load and no-load funds charges, low-load funds are used for bond or equity funds offered by management companies that also offer no-load funds.

The fee charged by a fund when the fund is bought and is typically in the 3 percent range of the Net Asset Value (NAV) is known as a "front-end load" or "sales load."

The correct answer to the question is not provided in the options given. However, the correct answer in this case would be A. low-load. The term "low-load" is used to describe funds that charge a reduced front-end load compared to traditional load funds, usually below 1 percent. These funds aim to offer investors a lower-cost alternative while still charging a fee when the fund is purchased.

To further clarify the other options:

B. Management fees: These are ongoing fees charged by a mutual fund or investment management company to cover the cost of managing the fund's assets. Management fees are typically a percentage of the fund's average net assets and are not directly related to the purchase or sale of the fund's shares.

C. Deferred sales load: This refers to a fee charged when an investor sells shares of a mutual fund after a specific holding period. Unlike a front-end load, which is paid at the time of purchase, a deferred sales load is assessed when the shares are redeemed. The fee may decrease over time and eventually reach zero if the investor holds the fund for a certain period.

D. No-load: A no-load fund is a type of mutual fund that does not charge a front-end or deferred sales load. Investors can buy or sell shares of a no-load fund directly from the fund company without paying a sales fee. This option does not apply to the given scenario.

E. Commissions: Commissions are charges incurred when buying or selling securities, typically associated with brokerage services. While commissions are common when trading stocks or other individual securities, they are not directly applicable to mutual funds.

F. 12b-1 plan: A 12b-1 fee is an annual fee that some mutual funds charge to cover distribution and marketing expenses. The fee is named after the section of the Investment Company Act of 1940 that allows funds to charge these fees. 12b-1 fees are typically expressed as a percentage of a fund's average net assets and are included in the fund's expense ratio.

To summarize, the correct answer is A. low-load, even though it was not included as an option. The term "low-load" refers to a front-end load fee that is charged when purchasing a fund but at a reduced rate compared to traditional load funds.