Class C shares are a type of mutual fund share that has some unique features that set them apart from other types of shares.
They have no front-end load, which means you won't be charged a fee to buy them.
However, they often have a higher expense ratio than other types of shares, which means you'll pay more in fees over time.
This can eat into your investment returns, but it's worth considering if you want to avoid paying a load upfront.
What Is a Class C Share?
A Class C Share is characterized by a load that includes yearly charges for servicing and distribution.
These charges are set at particular percentages and are basically a commission given to the individual or firm assisting the investor to decide the type of fund to choose.
The annual fee is paid yearly, whereas the front end load has charges paid when someone buys the shares, and the back end load gauges the charges if an investor decides to sell shares.
No load funds, on the other hand, don't have any commission charges whatsoever, and their fees simply go into the fund's Net Asset Value.
Types of Class C Shares
Class C Shares are characterized by a load that includes yearly charges for servicing and distribution.
These charges can be quite steep, with fund marketing and annual charges set at particular percentages.
The annual fee is essentially a commission given to the individual or firm assisting the investor in choosing the fund.
In contrast, front end loads have charges paid when someone buys the shares, while back end loads gauge the charges if an investor decides to sell shares.
No load funds, on the other hand, don't have any commission charges whatsoever, and their fees simply go into the fund's Net Asset Value.
Class C Share Characteristics
Class C shares are characterized by a load that includes yearly charges for servicing and distribution, which can be a front-end load or a back-end load.
The front-end load has charges paid when someone buys the shares, while the back-end load gauges the charges if an investor decides to sell shares.
No load funds, on the other hand, don't have any commission charges whatsoever, and their fees simply go into the fund's Net Asset Value.
What Is the Share?
A Class C share is a type of mutual fund share that comes with a load, which includes yearly charges for servicing and distribution.
These charges are essentially a commission given to the individual or firm assisting the investor to decide the type of fund to choose. The annual fee is typically set at a particular percentage.
Class C shares have a front end load, which means charges are paid when someone buys the shares, and a back end load, which gauges the charges if an investor decides to sell shares.
No load funds, on the other hand, don't have any commission charges, and their fees simply go into the fund's Net Asset Value.
Classes of shares are a way to separate stock by the amount of voting rights received by shareholders, and they can be found in listed corporations or private companies that have gone public.
For example, a listed corporation may have Classes A and B shares, which have different voting rights.
Return
Class C shares, like other share classes, have varying dividend priorities. Class C shares typically have lower dividend priorities compared to Class A shares.
Dividend priorities can impact an investor's profit share from the organization's success. The lower dividend priority of Class C shares means they may receive fewer dividends.
In some cases, companies offer multiple share classes, such as Class C and Class D. This can make it more complicated for investors to understand their dividend priorities.
The 12B-1 fee for Class C shares is significantly higher compared to Class A shares. This fee is a distribution or marketing fee.
Annual management fees for Class C shares can be lower compared to Class A shares. However, the higher 12B-1 fee can offset this advantage.
Class C
Class C shares are characterized by a load that includes yearly charges for servicing and distribution. These charges are often set at particular percentages.
Fund marketing, annual charges, and set percentages are all part of the load associated with Class C shares. This is in contrast to the front end load, which has charges paid when someone buys the shares.
The back end load gauges the charges if an investor decides to sell shares. Class C shares are also a type of mutual fund's share class.
No load funds don't have any commission charges whatsoever, and their fees simply go into the fund's Net Asset Value.
Class C Share Details
Class C shares have a load, which includes yearly charges for servicing and distribution. These charges are typically a percentage of the fund's Net Asset Value.
The annual fee for Class C shares is a commission given to the individual or firm assisting the investor to decide the type of fund to choose. This fee is usually a percentage of the fund's assets.
Class C shares also have a CDSC (Contingent Deferred Sales Charge) Sales Charge, which is a fee charged when an investor sells their shares. This fee is typically a percentage of the sale amount.
Here are some specific CDSC charges for C Shares of various funds:
Frequently Asked Questions
Is it better to own class A or class C shares?
For long-term investors seeking lower fees, Class A shares are generally a better choice. However, Class C shares with no load may be more suitable for beginners with short-term goals and limited investment funds.
Do American funds C shares convert to A shares?
Yes, American Funds C shares convert to A shares after 8 years. This conversion eliminates the potential for a higher cost over time.
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