What is the difference between Class B and Class C fund?
Class B shares also might convert automatically to a class with a lower 12b-1 fee and no contingent deferred sales load if the investor holds the shares long enough. Class C shares might have a 12b-1 fee, other annual expenses, and either a front-end or back-end sales load.
Like Class B shares, Class C shares typically impose higher annual operating expenses than Class A shares due primarily to higher 12b-1 fees. Class C shares may be less expensive than Class A or B shares if you have a shorter-term investment horizon because you'll pay little or no sales charge.
Key Takeaways
Class A shares involve paying a fee when you purchase your shares. Class B shares impose a fee when you sell your shares. Class C shares impose a fee while holding the shares, such as 0.5% of the value of the share per period.
Class A shares tend to have lower 12b-1 fees than Class B shares, making the expense ratio less than that which investors with Class B shares might pay. Instead of a front- or back-load, Class C shares generally impose an annual fee.
C-Class. C-Class shares are not subject to a sales charge at the time of purchase. An order for C-Class shares will be priced at the next NAV calculated after the order is received in good order and accepted by the fund or an authorized financial intermediary.
Key Takeaways
A B-share is one type of class of shares offered in a mutual fund that charges a sales load. The other common share classes are A-shares and C-shares. With B-shares, an investor pays a sales charge when they redeem from the fund, known as a back-end sales load or a contingent deferred sales charge (CDSC).
Class B mutual fund shares are seen to be a good investment if investors have less cash and a longer time horizon. To avoid the exit fee, an investor should typically remain in the fund for five to eight years.
Some mutual funds offer investors different types of shares, known as "classes." Each class invests in the same portfolio of securities and has the same investment objectives and policies. But each class has different shareholder services and/or distribution arrangements with different fees and expenses.
In contrast, Class B mutual fund shares have no load fees. Investors purchasing Class B shares may instead pay a fee when selling their shares, but the fee may be waived when holding the shares five years or longer. In addition, Class B shares may convert to Class A shares if held long term.
If you retain B Shares you will receive cash dividends on the B Shares twice a year fixed at 75 per cent of the interest rate known as LIBOR.
What are Class B and C shares?
Class-A shares are held by regular investors and carry one vote per share. Class-B shares, held primarily by Brin and Page, have 10 votes per share. Class-C shares are typically held by employees and have no voting rights.
Class C and 529-C shares
Class C shares convert to Class A shares in the month of the 8-year anniversary. 529-C shares convert to 529-A share in the month of the 5-year anniversary. This change ultimately benefits 529-C shareholders as they will incur lower 12b-1 expenses after conversion.
Share classes can vary from company to company, making it important for investors to understand the specific terms and differences. Class A shares generally have more voting power and higher priority for dividends, while Class B shares are common shares with no preferential treatment.
Class A Investors are offered a higher preferred return that is paid out first but do not participate in the upside. Class B investors are offered a lower preferred return that is paid out after Class A returns and do participate in the upside.
How much money is involved in a Series B funding round? A Series B round is usually between $7 million and $10 million. Companies can expect a valuation between $30 million and $60 million. Series B funding usually comes from venture capital firms, often the same investors who led the previous round.
Class C properties are typically more than 20 years old and located in less than desirable locations. These properties are generally in need of renovation, such as updating the building infrastructure to bring it up-to-date.
For that reason, investors generally should purchase Class A units (the initial sales charge alternative) if they expect to hold the investment over the long term (typically, five years or more). Class C units (the level sales charge alternative) are generally appropriate for shorter-term holding periods.
Class D mutual funds, or “no-load funds,” have no fee to buy them and no fee to sell them. There isn't a level percentage fee either. You pay only the 12b-1 fee and the annual expense ratio.
While it's possible to have a brand new Class B asset, it's more common that an asset becomes Class B due to age. Class B buildings are typically at least in good condition, and may achieve above-average rents, but rents and property values are lower in comparison to their Class A competitors.
Class B Unit means a Unit representing a fractional part of the equity interest in the Company having the rights and obligations specified with respect to the Class B Units in this Agreement.
What is a Class C share?
What Is a Class C Share? Class C shares are a class of mutual fund share characterized by a level load that includes annual charges for fund marketing, distribution, and servicing, set at a fixed percentage. These fees amount to a commission for the firm or individual helping the investor decide on which fund to own.
Commonly, Class B shares are held by promoters or senior management of a company and carry significantly higher voting rights than Class A shares. It effectively allows firms to raise capital (by selling Class A shares) while retaining control of voting (and retaining Class B shares).
Class C shares are commonly known as "level-load" shares. This means that they typically have a higher annual expense ratio than Class A or Class B shares, but they do not charge upfront sales fees or "loads".
As explained below, many mutual funds offer volume discounts to the front-end sales charge assessed on Class A shares at certain pre-determined levels of investment, which are called "breakpoint discounts." In contrast, Class B and C shares usually do not carry any front-end sales charges.
The Generally Accepted Accounting Principles (GAAP) basis classification divides funds into three fund categories: governmental, proprietary, and fiduciary. The GAAP basis classification assigned to a fund impacts how the fund is displayed in the Annual Comprehensive Financial Report.
