| In order to get the most out of your
| |
| | prefer these types of stocks because they
|
| returns, without paying a high fee, you
| |
| | are not required to pay front end fees
|
| need to be aware of the different classes
| |
| | and the deferred sales charge keeps
|
| of mutual fund stocks and their
| |
| | reducing. The other benefit is that these
|
| advantages and disadvantages. Mutual fund
| |
| | stocks are automatically converted into
|
| companies often charge a higher fee when
| |
| | Class 'A' stocks, which have a lower
|
| you opt to invest in 'high risk high
| |
| | yearly management expense ratio or MER.
|
| return' stocks. However, paying higher
| |
| | The only problem with Class 'B' stocks is
|
| fees does not necessarily ensure high
| |
| | that you are required to pay the deferred
|
| returns because stock prices fluctuate on
| |
| | sales fees in case you withdraw the funds
|
| a daily basis. This makes it difficult
| |
| | before the specified period. Another
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| even for professional fund managers to
| |
| | disadvantage is that you do not avail of
|
| predict the future course of a certain
| |
| | discounts, since there are no provisions
|
| stock. Mutual fund classes show the type
| |
| | for a breakpoint. This means that you are
|
| of stocks covered under each mutual fund
| |
| | not able to reduce investment costs even
|
| and the fees charged. The most common
| |
| | if you increase your investment.
|
| mutual fund classes are A, B, and C.
| |
| | Class C Stocks
|
| Class 'A' Stocks
| |
| | These types of stocks work best for those
|
| These types of stocks attract lower 12b-1
| |
| | planning to redeem the stocks within a
|
| fees and are considered the best if you
| |
| | short span of time. They are beneficial
|
| are planning to keep investment for two
| |
| | because you are not required to pay the
|
| or more years. Investing in such stocks
| |
| | front-end fees. The back-end load is less
|
| makes you eligible to receive discounts,
| |
| | too, one percent in most cases. Even this
|
| every time your investment arrives at a
| |
| | one percent back-end load is eliminated
|
| certain amount. The amount is selected at
| |
| | if you keep the investment for more than
|
| the time of buying the mutual fund and is
| |
| | a year. Some of the drawbacks of Class
|
| referred to as the 'breakpoint'.
| |
| | 'C' stocks include compulsory back-end
|
| Discounts are also offered when you
| |
| | load, higher MER, zero discounts and lack
|
| express the intent of reaching the
| |
| | of provision for automatic conversions.
|
| breakpoint within a specified period.
| |
| | In order to benefit from your
|
| However, in case you are unable to reach
| |
| | investments, you need to consider a
|
| the breakpoint prior to the deadline, as
| |
| | number of factors, such as the time for
|
| mentioned in the 'letter of intent', you
| |
| | which you plan to invest, the frequency
|
| are required to pay the regular front-end
| |
| | of your investments and whether you are
|
| fees.
| |
| | liable to withdraw the funds in the near
|
| Class B Stocks
| |
| | future. The analysis of the benefits and
|
| These types of stocks are characterized
| |
| | drawbacks of each class of stocks will
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| by their contingent deferred sales charge
| |
| | help you to select the most appropriate
|
| and are appropriate for investors who
| |
| | investment option, based on your specific
|
| have limited resources and are looking
| |
| | needs and preferences.
|
| for long term investment. Small investors
| |
| |
|
