What do Class C shares in mutual funds typically assess?

Class C shares in mutual funds are primarily designed to assess 12b-1 fees, which are annual fees used to cover the costs of marketing and distributing the fund. While Class C shares might have lower front-end loads compared to Class A shares and they usually do not assess a back-end load like Class B shares, they often charge a higher 12b-1 fee on an ongoing basis. This structure makes Class C shares appealing for investors looking for a more flexible investment option without the upfront costs associated with front-end loads.

Investors should consider that while Class C shares avoid front-end loads and do not typically have back-end loads, the presence of higher ongoing fees can impact long-term investment returns. Therefore, understanding the fee structure of Class C shares, particularly the 12b-1 fees, is crucial when evaluating them as part of a mutual fund investment strategy.