Excerpted from Bogle on Mutual Funds by John C. Bogle, pages 196-197

Transaction fees. Sales loads are by far the predominant form of transaction charge applicable to fund shares (that is, charges paid directly by the investor making the transaction, as distinct from the fund itself). These loads are usually shared by a fund's sponsor, distributor, and sales representative. In that sense, they contrast with two other transaction charges: the redemption charge (often 1% of assets), paid when shares are liquidated or exchanged into shares of another fund, and the transaction charge, paid when fund shares are purchased. Both charges are normally paid not to a sales representative but to the fund itself. (You should find out which is the case.) Here, the costs of selling portfolio securities (in the first case) and purchasing portfolio securities (in the second) are borne by the investor making the transaction, rather than by the fund itself (i.e., all of the shareholders who remain in the fund). These charges - provided they are paid to the fund itself - should not be considered as sales loads in any sense. They have the effect of indicating to existing shareholders that the costs incurred in investing additional cash flows (or in liquidating securities when there are cash outflows) will tend not to dilute their interests. So it is hard to see that transaction fees are anything but equitable both to new and existing shareholders.