Definition of mutual fund share classes

alphabetical class designations that follow a mutual fund's name in most newspaper listings and usually, but not always, identify a fee structure as follows: Class A shares typically have a front-end load, a sales charge payable when you buy the fund. Class B shares typically have a back-end load, payable when you redeem your fund shares, but declining the longer you hold the fund until finally, after six to eight years, it "converts" to zero. Both A and B shares usually have an additional 12b-1 marketing fee, higher in the case of B shares. Class C shares have no front-end load, a rear-end load ranging from very low (1 percent) to nothing, but have relatively high 12b-1 fees (translating into high expense ratios.) Class A, B, and C shares are by far the most common. Class D shares, where they exist, differ from one mutual fund company to another, in one case signifying front-end loads and no 12b-1 fees, in others high 12b- 1 and no front-end loads, in still others, a rear-end load structured differently than that fund company's B shares. Class I and Class Y shares are institutional shares, not available to retail investors; if they are included in your 401k plan, they probably have low annual expenses and don't have a sales charge. M and T Class shares are different for each fund company, but are usually a variation on C shares. ZClass shares are either owned by the fund company's employees or by investors who got into a fund when it originally started as a no-load fund and stayed in after it became a load fund.