Redemption Fee

Redemption Fee This is meant to discourage mutual fund timing by charging investors a stiff fee every time an investment is sold before a predetermined amount of time. This makes it somewhat costly to sell an investment prematurely, which means that most investors will only do it when they feel it is absolutely necessary. This fee is usually only applicable for up to one year after the investment has been made, but exceptions are possible. This is meant to help long term investors as well, since short term investors generally have a negative impact on the overall market, even when they are quite successful themselves.