If one could make a general statement about mutual fund fees, it is that they are complex. When buying a mutual fund, it would be good to talk to someone at the fund company and try to get a bottom line fee quote that counts all fees.
Share classes are another way that funds determine fees and they are quite complex all by themselves. Essentially, you can buy the same fund but buy it in three different classes (as well as possibly others). These classes (A, B, and C) have different fee structures and these can change.
A class A fund purchase will charge you a front-end fee. This fee is taken out of your investment and therefore reduces your total investment up-front. There are also what are called “asset based sales charges.” The good news for the Class A fund purchase is that you can get breaks if you make a large purchase, if you purchase other funds in the same family, or if you make regular purchases through an automatic purchase arrangement.
Class B fund purchases have no up-front sales charge. Fees are charged when the fund is sold. But if you hold the fund long enough, the fees will diminish and be eliminated altogether. At that time, however, it may be converted to class A and the same class A sales charges will be applied.
Class C also has no up-front fees. They are never converted to class A and there are fees for early sales, usually less than one year.
As I said, this is quite complex and you really need to have someone spell out exactly what the fee schedule looks like when all is taken into account. Because mutual fund fees can add up, it is as important to look at the fee structure as it is to choose the best fund to invest in.