Understanding Mutual Fund Classes: A-Shares

When you are investing in mutual funds, the term "A-shares" might come into play. Understanding what this term means is essential to your success as a mutual fund investor in the long-term. Here are the basics of mutual fund classes and what "A-shares" means.

Mutual Fund Classes

Mutual funds, like stocks, are broken down into different classes. However, with mutual funds, the classes have to do with this fee structure that is associated with the shares. Most mutual funds have three main classes that they use: A-,B-, and C-shares. 

A-Shares

A-shares are a type of mutual fund share that charges you a front-end load. This means that you will pay a transaction fee whenever you purchase shares in the mutual fund. By comparison, a B-share mutual fund will not charge anything on the front end and may charge you something whenever you sell the shares.

Although the idea of paying more on the front end of a transaction might not seem appealing, it could have its advantages. With this method, you can take advantage of what are called breakpoints. This is a break on sales commission when you buy a certain number of shares. This allows you to save money if you have a large amount to invest.

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