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
When breakpoints are available, Class A shares often fit long-term investors because the front-end sales charge can be reduced and ongoing expenses are usually lower than Class B or C shares.
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