An entrepreneur is thinking about adding TRIEF to her portfolio. There are many share classes in...
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An entrepreneur is thinking about adding TRIEF to her portfolio. There are many share classes in TRIEF. Despite the fact that all classes hold the identical portfolio of assets, each has its own expense structure. There are two classes of shares in this mutual fund: A and B. Three years is the time horizon linked with the investor's goal in acquiring TRIEF. She anticipates a 7% annual return on equities investments with risk characteristics comparable to TRIEF. Class A shares have a 3% front-end load, no back-end load, and a 1.5 percent annual fee. Class B shares have no front-end load and a 1.25 percent annual expense. Class B shares have no front-end load and a 1.25 percent annual expense. The back-end burden on Class B shares is 6% in the first year and then drops to 1% each year after that. Which share class should the client select? An entrepreneur is thinking about adding TRIEF to her portfolio. There are many share classes in TRIEF. Despite the fact that all classes hold the identical portfolio of assets, each has its own expense structure. There are two classes of shares in this mutual fund: A and B. Three years is the time horizon linked with the investor's goal in acquiring TRIEF. She anticipates a 7% annual return on equities investments with risk characteristics comparable to TRIEF. Class A shares have a 3% front-end load, no back-end load, and a 1.5 percent annual fee. Class B shares have no front-end load and a 1.25 percent annual expense. Class B shares have no front-end load and a 1.25 percent annual expense. The back-end burden on Class B shares is 6% in the first year and then drops to 1% each year after that. Which share class should the client select?
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