Pooled Investment Characteristics: Rapid Fire

What this video covers

• The cost trade-off between Class A (front-end load, low ongoing fees, breakpoints), Class B (contingent deferred sales charge, converts to A), and Class C (level load, no conversion, costliest long-term)
• Why the sales load percentage is calculated on public offering price (POP), not net asset value (NAV), and the simple formula POP equals NAV plus sales load
• Breakpoint eligibility, letter of intent (LOI) timing (13 months, backdated up to 90 days), and why failing to offer breakpoints is a regulatory violation
• The 12b-1 fee caps (0.75% distribution plus 0.25% shareholder service, 1.00% combined maximum) and what the expense ratio excludes (sales loads, brokerage commissions)
• Subchapter M and the 90% distribution threshold for investment-company taxable income and qualifying tax-exempt interest to avoid entity-level tax
• Forward pricing for open-end funds (redeem at NAV, next calculated after 4:00 PM Eastern) versus intraday market pricing for closed-end funds and exchange-traded funds (ETFs)
• Why capital gains distributions are always long-term to the investor regardless of personal holding period, and how phantom gains can tax a new investor on pre-purchase appreciation
• Matching fund types to correct benchmarks (S&P 500 for large-cap, Russell 2000 for small-cap, Bloomberg U.S. Aggregate Bond Index for investment-grade bonds) and detecting style drift