SIE practice questionhardMutual Fund Share Classes
A client plans to invest $25,000 in a mutual fund and wants to maximize long-term returns while minimizing ongoing expenses and sales charges. Which of the following share classes is likely to be the best choice, assuming breakpoints are available?
- AClass C shares
- BClass B shares
- CClass A shares✓ Correct answer
- DNo-load shares
Explanation
Why C — Class A shares
A is correct; with breakpoints, Class A shares reduce sales charges and have the lowest ongoing expenses, making them best for long-term investors. B and C have higher ongoing costs. D is only possible if available and may lack breakpoint benefits.
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