Mutual Fund - Share Classes

Share Classes

A single mutual fund may give investors a choice of different combinations of front-end loads, back-end loads and 12b-1 fees, by offering several different types of shares, known as share classes. All of the shares classes invest in the same portfolio of securities, but each has different expenses and, therefore, a different net asset value and different performance results. Some of these share classes may be available only to certain types of investors.

Typical share classes for funds sold through brokers or other intermediaries are:

• Class A shares usually charge a front-end sales load together with a small 12b-1 fee.
• Class B shares don't have a front-end sales load. Instead they, have a high contingent deferred sales charge, or CDSC that declines gradually over several years, combined with a high 12b-1 fee. Class B shares usually convert automatically to Class A shares after they have been held for a certain period.
• Class C shares have a high 12b-1 fee and a modest contingent deferred sales charge that is discontinued after one or two years. Class C shares usually do not convert to another class. They are often called "level load" shares.
• Class I are subject to very high minimum investment requirements and are, therefore, known as "institutional" shares. They are no-load shares.
• Class R are for use in retirement plans such as 401(k) plans. They do not charge loads, but do charge a small 12b-1 fee.

No-load funds often have two classes of shares:

• Class I shares do not charge a 12b-1 fee.
• Class N shares charge a 12b-1 fee of no more than 0.25% of fund assets.

Neither class of shares charges a front-end or back-end load.