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Share Class Options
Mutual fund share classes offer investors different ways to make mutual fund purchases that best meet their individual needs. Most Franklin Templeton funds offer two share classes for retail investors: Classes A and C.1
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Each share class has its own sales charge and expense structure. Your financial advisor can help you evaluate which share class best meets your situation. It's important to consider how much you plan to invest and how long you expect to own shares of the fund. The following table shows how charges and expenses vary for Class A and C shares.
Overview of A and C Shares
| Class A | Class C | |
|---|---|---|
| Front-end sales charge | Yes, generally 5.75% for equity funds
4.25% for long-term fixed income funds 2.25% for intermediate-term and limited-term fixed income funds |
No |
| Back-end sales charge, (contingent deferred sales charge, CDSC) | No2 | Yes, 1.00% for 12 months |
| Quantity discounts (breakpoints) | Yes | No |
| Expenses (relative) | Generally lower than Class C | Generally higher than Class A |
The Difference between A and C Shares
The primary difference between share classes is the structure and timing of the sales charges and expenses. Depending on which share class you choose, you’ll pay a sales charge when you buy or sell your shares. The majority of this sales charge then goes to financial advisors as compensation for their advice and expertise.
Class A Shares
- "Front-end" sales charge (paid at the time of investment).
- Fees and expenses generally lower than C shares, due to lower distribution fees.
- Sales charges decline as investment amount increases (breakpoints). Please consult a fund prospectus for detailed information on sales charges and quantity discounts.
Class C Shares
- No initial or "Front-end" sales charge.
- 1% "Back-end" sales charge (also called contingent deferred sales charge or CDSC) on shares sold within 12 months of purchase.
- Fees and expenses generally higher than Class A shares.
R Shares for Retirement Plans
With Class R shares, there is no initial sales charge. Class R shares are available for many Franklin Templeton funds and are offered for purchase to the following investors:
- Employer-Sponsored Retirement Plans3
- Any trust or plan established as part of a qualified tuition program under Section 529 of the Internal Revenue Code
- Health Reimbursement Accounts and Health Savings Accounts, either as a direct investment or as a separate or managed account
Please note, Class R shares are not available for IRA rollovers to Franklin Templeton.
Important Legal Information
Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. Download a summary prospectus and/or prospectus, which contains this and other information. Please carefully read a prospectus before you invest or send money.
Footnotes
- Effective close of market February 28, 2005, new sales of Class B shares were discontinued. Existing Class B shareholders may reinvest dividends, as well as exchange shares into other funds that offer B shares. They cannot, however, add subsequent investments to their B share accounts.
- For NAV purchases of $1 million or more, a CDSC of 1% may apply to equity funds, 0.75% for fixed income funds, to shares redeemed within 18 months.
- An Employer-Sponsored Retirement Plan is a Qualified Retirement Plan, ERISA covered 403(b) and certain nonqualified deferred compensation arrangements that operate in a similar manner to a Qualified Retirement Plan, such as 457 plans and executive deferred compensation arrangements, but not including employer sponsored IRAs.
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