Should I buy A, B, or C Share mutual funds?

Answer 1

"A" shares have lower annual expenses of below 1%. While you pay upfront sales charge on purchases, you get low annual expenses.
"B" shares have higher annual expenses between 1%-2%. You don't pay upfront sales charge, but you do pay a sales charge when you sell your shares within the first 5 years. The sales charge decreases every year. For example, if you sold a share in your first year, you will pay 5%. In 2nd year, you will pay 4% and so on. "B" shares become "A" shares in the 8th year.
"C" shares are similar to Class "B" shares except they have even higher annual expenses than "B" shares. They usually have a redemption fee that last about 1 year. "C" shares can never become class "A" shares.

So, if you want to fully invest your money, you will have to accept higher annual expenses, which is Class B or C shares. If you want low annual expenses, but willing to pay a sales charge upfront, then buy Class A shares. The lower the annual expenses, the better rate of the return on your investment. Before investing into a mutual fund, you should carefully read the prospectus to understand your mutual fund.

I personally own Class A shares of three different mutual funds in my Roth IRA.

Answer 2

B Shares are the absolute worst. B shares carry a larger management fee than the other shares, and that fee doesn't amortize, so you have to pay it as long as you hold the fund. A or C, I'm kind of indifferent between.

You're best off with a no-load, though. Check out T. Rowe Price for some pretty good no load options.

Answer 3

B shares carry a deferred sales charge if you sell. Always stick with either A or C.

If you want to hold onto the funds for over 5 years, then go A, otherwise C is a safe choice.

Answer 4

Depends on the risk facture you wish to take. B funds are the best.