What does "back-end load" refer to?

"Back-end load" specifically refers to a fee charged when an investor sells their mutual fund shares. This type of load is typically designed to discourage investors from redeeming their shares too quickly, as the fee often decreases over time the longer the investment is held.

This fee structure is intended to align the interests of the fund, which benefits from longer-term investments, with those of the investor. An investor who sells their shares early would face this penalty, while selling shares later, after a specified period, might incur little or no fee.

The other options provide details about different types of fees or costs associated with mutual funds. For instance, a fee for administrative services or a deduction from profits when shares are sold do occur in the context of mutual funds, but they do not specifically capture the definition of "back-end load." Also, capital gains realized from investments concern profits made on the investment's value increase rather than representing a fee structure involved in the sale of mutual fund shares. Thus, the nature of the "back-end load" is clearly tied to the act of selling the shares, making the correct answer about the fee incurred at that point in the investment process.