Understanding Mutual Fund Share Classes
If you would like detailed information about share
classes, click here to download
a prospectus from the Literature area. If you would like to learn more about Armada’s different
share classes, and who they may be appropriate for, read on!
Mutual fund share classes are designed to meet the needs of diverse investors by offering distinctly
different fee structures and 12b-1 fees. Mutual fund investors can choose to pay when they invest, after they invest,
or as they invest. Time frame is an important factor in selecting a share class, because some share classes are appropriate
for long-term investors and others are better suited to short-term investors. Armada Funds offers four retail share classes
(A, B, C and H shares), and one institutional (I shares) share class. For each share class, fund expenses are structured differently.
Class A Shares
Class "A" shares are sometimes called front-end loaded shares because a sales charge is paid immediately, before any principal is invested.
For example, if you put $1,000 in an "A" share with a 5.5% sales charge, $55 would be deducted from your investment. The remaining $945 of
principal would be invested in the fund. In addition to an upfront sales charge and other fund expenses, investors pay a 12b-1 fee. "A"
Shares typically have lower overall expense ratios than other retail share classes.
Class B Shares
Class "B" shares are sometimes called back-end loaded shares because a sales charge is paid if you sell shares within a certain number of
years (this charge is also known as a contingent deferred sales charge or CDSC). For example, if you invest $1,000 in a "B" share, the
entire $1,000 is invested immediately. If you sell your shares within two years, a sales charge equal to 5% of the value of your assets
is assessed. If your savings have appreciated during this time, you owe 5% of the current value of your account. The back-end sales
charge declines by 1% each year after year two and after year five disappears.
Investors pay higher annual 12b-1 fees for class "B" shares than class "A" shares. After eight years, "B" shares convert into "A" shares and
investors' 12b-1 fees are reduced.
“B” shares may be appropriate for investors with long-term goals. If you withdraw your savings during the first five years, you’ll pay a back-end load. However, if you hold your shares for more than five years, you may be able to avoid paying a sales charge altogether.
Class C Shares
Class "C" shares have a low back-end sales charge that is assessed for a shorter period of time than "B" shares. If you sell shares within 18 months
of purchase, a 1% contingent deferred sales charge or CDSC is assessed. An exception is made for dividends or distributions reinvested
into "C" shares.
Class "C" shares charge a higher 12b-1 fee each year than Class "A" shares, and do not convert into "A" shares at any time.
"C" shares may be appropriate for investors with short- to intermediate-term goals. A higher 12b-1 fee is paid; however, there is no CDSC
after 18 months, so investors can redeem without a charge after a shorter period of time, unlike "B" shares.
Class I Shares
Class "I" shares are sometimes called institutional shares because they are intended only for financial institutions purchasing
shares for their own or their clients' accounts. Class "I" shares have no front-end sales charge and low annual operating expenses and
cannot be purchased by the general public.
Class R Shares
Class "R" shares are sometimes called Retirement Shares because they were designed for retirement plan investors. “R” shares have a low back-end sales charge. If you sell “R” shares within 18 months of purchase, a .75% contingent deferred sales charge or CDSC is assessed. The CDSC is calculated on the lowest of either: the net asset value (NAV) of the shares at the time of purchase, or the NAV of the shares next calculated after the Fund receives the request to sell.
Class "R" shares have a lower 12b-1 fee than other back-end loaded share types, and do not convert into "A" shares at any time.
"R" shares may be appropriate for investors in qualified retirement plans, such as employer sponsored 401(k) plans or individual retirement accounts (IRAs). They also may be appropriate for individuals who wish to rollover savings from a qualified retirement plan into an IRA.
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