recently, they have begun offering Class C shares. Class C shares blend the advantages of both Class A and B shares. When purchasing Class C shares, the investor’s money is 100-percent invested. There is no front-end sales load, as there is with Class A shares. Plus, as long as you don’t redeem the shares within the first year of investing the money, you may pull out all of your money without any type of surrender charge. Therefore, there is no front-end or back-end load. However, your money will be subject to a one-percent sur- render charge if you redeem your mutual fund within the first year. The rules for same-fund-family exchanges apply to Class C shares, as they do with Class B shares. Class C shares do not share in the conversion privilege, as do Class B shares. They will remain Class C.
Class A versus Class B versus Class C There is no clear-cut answer as to which share class is the best. All three have their advantages and disadvantages. For larger amounts of money, Class A shares would probably be the best due to the reduction in the sales charge and since there are no back-end fees. If your money is within an IRA, perhaps Class B shares would be the better option. But if you wanted to invest your money and thought that you may need it within a few years, Class C shares may be the way to go. The share class that you invest in is really determined by your time frame. You may find that a mixture of share classes is preferable.
NO-LOAD MUTUAL FUNDS
No-load mutual funds are those that have no front-end or back-end sales load. Both purchases and redemptions for no-load funds are done at the fund’s NAV. Sometimes, the 12-b-1 fees associated with no-load funds have been higher than with load funds since there are no sales charges. In the past few years, no-loads have become increasingly popular with investors because they are easy to move around in. Without any associated sales charges, investors may stay in the fund for as long, or short, as they want.