C-Shares

finance a la shmoop what are sales charges and sales loads sales charges or

loads as they're lovingly called in the industry are just commissions customers

pay when they buy mutual funds but because there are so many ways in which [People dealing out cash]

to pay these commissions or at least in the way they get calculated they become

a whole trivia contest catalog on their own in the good old days things were [People playing a trivia contest gameshow]

simpler mutual funds were paid in a load up front like you bought a thousand [Stacks of cash appear]

dollars worth of a mutual fund paid 50 bucks for the privilege and then the

professionals you hired went to work with your remaining nine hundred fifty

bucks to make it you know grow but then came break points basically volume

discounts as they apply to the pricing of those commissions the more you invest

a smaller the percentage you pay in Commission then came quote no-load

unquote funds which instead of charging say five percent upfront and then

investing that nine fifty under a fee structure of one percent a year they

started investing all thousand dollars with no Commission upfront but instead

customers would pay two percent of your commission so over time if mutual fund

buyers held that fund five years or more while they paid more than they would

have even in the most onerous of upfront a share load situations yeah not good no [Load comparisons appear]

low doesn't mean no commission or fee or sales charge it's just marketing stuff

for gullible consumers who bought it so why is it called the load anyway well [Person purchasing item from checkout]

the Commission itself detracts from the total amount of capital being invested [Commission cash taken from capital]

which then has to grow and presumably beat the market or you just buy an index

fund right well if a mutual fund investment house isn't in fact beating [Man and woman fighting in martial arts]

the market then mathematically there's no reason to buy the fund because

investors can simply buy the market in investing in those index funds or ETFs [Man discussing investments with index funds or ETFs]

or exchange-traded funds yeah so the load is essentially rocks in your

backpack or a natural headwind against the sales of that mutual fund they feel [Man on a boat with a headwind]

like a heavy load if you're ascending mutual fund mountain

with the 18 rocks there in your Patagonia pack and it's probably no [Man sweating with backpack full of rocks]

surprise that mutual fund mountain is Disney's least popular ride