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C-Share

Source: Investopedia
This Article has been Edited for Accessibility

C-Share

What is a 'C-Share'

A C-share is a class of mutual fund with a level load. Class C shares tend to not have front-end loads, but they often carry small back-end loads. These loads are typically around 1% and may vanish once the investor has held the shares of the mutual fund for a year.

Explaining 'C-Share'

Class C shares often have lower expense ratios than class B shares but higher expense ratios than class A shares. Class C shares may be a good option for investors who plan to sell after a relatively short period but will hold the shares for at least a year.

Fees Associated with Class C Shares

In addition to the back-end load of contingent deferred sales charge (CDSC) associated with class C shares, these shares may also charge a 12b-1 fee. A fund charges a 12b-1 fee to cover its distribution and marketing costs. Total 12b-1 fees are capped at 1% annually and are reflected in the fund's expense ratio. Of the 1% fee, distribution and marketing expenses can be up to 0.75%, while service fees max out at 0.25%.

Example of a Fund Offering Class C Shares

The Calamos Growth Fund is an example of a fund with both class A and class C shares. The class A shares charge an expense ratio of 1.32%, 0.25% of which is a 12b-1 fee, and a maximum 4.75% front-end load that decreases based on the amount that is invested. The fund's class C shares don't have a front-end load, but they carry a maximum 1% CDSC on shares held less than one year. The class C shares also impose the maximum 1% 12b-1 fee, pushing the fund's overall expense ratio to 2.07%.