B-Shares Explained: A Guide for Mutual Fund Investors

Many investors choose to invest in B-shares of mutual funds. Understanding what the different classes of mutual funds are and what B-shares are in particular could benefit you as a mutual fund investor. Here are a few things to consider about B-shares and mutual fund classes.

The Different Mutual Fund Classes

Mutual funds are typically broken down into three different types of shares. You have A-shares, B-shares, and C-shares. With these different types of shares, you will deal with a unique form of fee structure for your investment. Therefore, understanding the difference between these can help you save money depending on your investment style.

B-Shares

The B form of mutual fund share provides you with a back-end fee structure. This is also sometimes referred to as a no-load mutual fund. This means that you will pay nothing up front when you buy the shares of the mutual fund. However, you will pay some sort of a transaction fee when you sell the shares.

This transaction fee can be minimized if you hold your shares for an extended period of time. Many class B shares will convert to class A shares over a certain amount time, which can also save you money on the expense ratio of a mutual fund.