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You are considering investing $10,000 in a global balanced fund that typically holds 60% of its assets in stocks and 40% in bonds. You believe
You are considering investing $10,000 in a global balanced fund that typically holds 60% of its assets in stocks and 40% in bonds. You believe this fund can earn 8% per year before fees. You are asked to choose between one of two share classes with the following attributes: Class A1 Class B Annual Management Fee: 1.00% .85% 12b-1 Fee: .40% None Front-End Load: None 5% Back-End Load: 4% (declining) None Notes: 1 All fees are percentages of the Fund's net asset value (NAV) as calculated at the time the particular fee is applied. 2 The 12b-1 fee is paid at the end of each year on the full NAV of the Fund at that time, which is the same manner in which the annual management fee is charged. In addition, the 12b-1 fee is only charged for the first five years an investor holds this fund; it is fully waived after that time. 3 The full back-end load applies to investors who sell the Fund after holding it for less than one year. This fee declines by 1% of NAV on each anniversary of the initial investment in the Fund, reaching 0% after four years. If you expect you will hold this Fund for nine years, which Fund share class is likely to be the better choice? You are considering investing $10,000 in a global balanced fund that typically holds 60% of its assets in stocks and 40% in bonds. You believe this fund can earn 8% per year before fees. You are asked to choose between one of two share classes with the following attributes: Class A1 Class B Annual Management Fee: 1.00% .85% 12b-1 Fee: .40% None Front-End Load: None 5% Back-End Load: 4% (declining) None Notes: 1 All fees are percentages of the Fund's net asset value (NAV) as calculated at the time the particular fee is applied. 2 The 12b-1 fee is paid at the end of each year on the full NAV of the Fund at that time, which is the same manner in which the annual management fee is charged. In addition, the 12b-1 fee is only charged for the first five years an investor holds this fund; it is fully waived after that time. 3 The full back-end load applies to investors who sell the Fund after holding it for less than one year. This fee declines by 1% of NAV on each anniversary of the initial investment in the Fund, reaching 0% after four years. If you expect you will hold this Fund for nine years, which Fund share class is likely to be the better choice
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