Deferred Load
Categories: Mutual Funds, Managed Funds
When mutual funds began selling, the managers paid commission to fund brokers in the form of a load, which customers paid up front when they bought the fund. That is, they might invest $2,000 and would have paid a 5% commission, so that after day one, they had lost $100 on their investment, which now showed up as $1,900 on the books. There was an additional effect here in that they had a smaller base that earned interest.
To reduce the weight of this load and to make funds more attractive to customers, funds began to let customers defer the commissions. For some funds, customers paid the commission when they redeemed the fund. For others it was after some set period of time or when assets had reached a certain level.
The key idea is that the commission in a deferred load mutual fund transaction is paid "later." Mañana. Procrastination. You get the idea.