Understanding Mutual Fund Classes: C-Shares

C-shares are a specific class of mutual fund shares that investors can purchase. Mutual funds are typically broken down into three different classes with A-, B-, and C-shares. Here are the basics of C-shares and how they could benefit you as an investor.

C-Shares

The different classes of mutual fund have to do with the different types of fee structures that are available. With a C-share of a mutual fund, you will be able to benefit from a level fee structure. Purchasing A-shares means that you will pay a percentage up front, while for a B-share, you have to pay a back-end fee. With a C-share, you will not have to pay a fee on the front end. You could have to pay a small fee on the back end of approximately 1 percent. However, with this type of share, you will usually pay most of your money in the expense ratio over the life of the mutual fund.

Investment Considerations

One benefit of this type of share is that all of the money that you invest will be able to earn interest. You also will not have to pay much if anything when you cash out your shares. However, if you plan on investing for the long term, this may not be to your advantage because of the higher expense ratio involved.

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