Share Classes & Sales Charges
Class A shares charge a front-end load reduced by breakpoint discounts at higher purchase levels; Class B carry a declining back-end charge (CDSC); Class C charge a level annual fee; 12b-1 fees cover distribution costs in all classes.
The classic item gives a dollar amount and a holding period and asks which class fits: a large amount that reaches a breakpoint points to Class A (the discount plus a lower ongoing 12b-1 fee wins long-term), while a small, short-horizon investment points to Class C and its level load. Watch the 12b-1 trap — a fund may be called “no-load” only if its asset-based 12b-1 and service fees total 0.25% or less of net assets annually; anything higher is still a sales charge, so a “level-load” C share is never truly no-load. Another favorite: the public offering price (POP) = NAV ÷ (1 − sales charge %), and the load is figured on the POP, not on NAV.
Don’t confuse fund share classes (open-end, bought at POP) with closed-end funds and ETFs, which trade on an exchange at market price and cost a commission, not a load — so breakpoints, LOIs, and rights of accumulation simply don’t apply there. Memory hook: A is “Avoid” the ongoing fee, C is “Costly to hold.”
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