Which type of share could potentially impose a deferred sales charge?

Class B shares are designed to potentially impose a deferred sales charge, also known as a contingent deferred sales charge (CDSC). This charge typically applies when an investor sells their shares within a certain period after purchase, commonly lasting several years. The purpose of the deferred sales charge is to discourage short-term trading and to promote long-term investing.

Investors in Class B shares do not pay an upfront sales load when purchasing the shares. However, as part of the agreement, if they redeem their shares before a specified timeframe has elapsed, they might incur this sales charge. Over time, Class B shares may convert to Class A shares, which generally carry lower expense ratios and no deferred sales charge. This structure incentivizes investors to hold onto their investments longer, aligning their interests with the performance of the underlying assets in the fund.

Class A and Class C shares typically have different structures regarding fees. Class A shares often come with an upfront sales charge but do not have a deferred sales charge, while Class C shares may have a level load or high fees but no deferred charges. Thus, Class B shares stand out specifically for their potential to impose a deferred sales charge based on the holding period.