What Is A Mutual Fund Share Class Exchange?

Confusing investors everywhere, one mutual fund may have multiple share class offerings. Multiple versions of a share class are often used to differentiate between the types of fees that the fund carries. In the commission-based world, those include front-end fees, back-end feeds, sales charges, 12b-1 fees, and more.

Other share class differences are explained by the minimum initial investment requirements. For example, one share class might have a higher minimum initial investment but a lower expense ratio while another has no minimum investment and a higher expense ratio.