What distinguishes a sliding fee scale in load funds?

A sliding fee scale in load funds is characterized by a fee structure that decreases based on the total investment amount made by the investor. This approach incentivizes larger investments by reducing the percentage of the fee charged as the investment size increases. For example, if an investor puts in a significant amount of money, the fee percentage may be lower compared to a smaller investment. This fee structure is designed to reward larger investors while ensuring that fees become more manageable as the investment grows.

The concept of scaling fees based on performance, market conditions, or charging a fixed fee does not align with the function of a sliding fee scale. Performance-based fees would vary according to how well the fund performs, while market condition fees would fluctuate according to the current market environment. A fixed fee, however, applies the same charge regardless of the size of the investment, which contradicts the fundamental principle of a sliding fee scale that adjusts fees according to the amount invested.