Sales Charges (Loads)
Chapters in this video
- 0:00 Share classes as different payment plans for the same product
- 1:11 Class A front-end load and the 8.5% maximum step-down rules
- 3:37 Class B back-end CDSC and declining exit penalty
- 5:03 Class C level load and long-term cost trap
- 6:11 No-load funds and the 0.25% ongoing fee limit
- 7:32 Rapid-fire exam recap
What this video covers
- Why the 8.5% maximum front-end load is a privilege funds must earn, and the four conditions that lock it in (breakpoints, rights of accumulation, no service fee)
- The exact step-down ceilings when a fund misses a condition: 8.0%, 7.75%, and 7.25%
- How to calculate the amount actually invested after a front-end load, and why the load applies to public offering price (POP), not net asset value (NAV)
- What a contingent deferred sales charge (CDSC) is, why it declines over time, and the automatic conversion of Class B shares to Class A after the CDSC period expires
- Why Class C shares are the most expensive long-term hold due to persistent 12b-1 fees up to 1%, and why conversion to Class A is fund-specific, not guaranteed
- What qualifies a fund as "no-load" and the critical 0.25% ongoing marketing fee ceiling that still applies
- How to match an investor profile (lump sum, time horizon, short-term need) to the correct share class on exam day
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