Share Classes

What this video covers

• Why Class A, B, and C shares hold identical underlying portfolios yet produce radically different total costs based on how and when fees are extracted
• The 8.5% maximum front-end load on Class A shares, and the three required discounts that let a fund charge it: breakpoints, rights of accumulation (ROA), and dividend reinvestment at net asset value (NAV)
• How Class B CDSC schedules decline over time (e.g., 5% to 0% across 6-8 years), the automatic conversion to Class A at schedule expiration, and why most funds have discontinued B shares
• The Class C "perpetual vampire fee" trap: same 1.00% 12b-1 fee as Class B but never converting to Class A, making C the most expensive long-term option despite no front-end load
• Breakpoint mechanics including the 13-month letter of intent (LOI) window, 90-day backdating provision, non-binding pledge status, and escrow share liquidation for unfulfilled LOIs
• How rights of accumulation (ROA) use current NAV (not original cost) to combine prior and new investments across a fund family, with no time limit
• The breakpoint sale violation: why an advisor must disclose when a client sits just below a threshold, and the regulatory consequences of prioritizing commission over client savings