Consider a mutual fund with two share classes.

Class A Class B

Front-end 5% -

Back- end - 4%

12b-1 - 0.50%

Expense ratio 1.50% 1.50%

Class B shares back-end load fees start at 4% and fall by 1% for each full year the investor holds the portfolio. Assume the rate of return on the fund portfolio net of expenses is 10% annually.

The expected return in Class A is greater than that of Class B if the investment horizon is longer than year(s).