American Funds to eliminate Class B shares

American Funds will no longer sell Class B and 529-B shares of its mutual funds, effective April 21, the firm said today.
APR 03, 2009
American Funds will no longer sell Class B and 529-B shares of its mutual funds, effective April 21, the firm said today. The reason for the move is that the arrangement American Funds had with a third party to front commissions to brokers who sold its B shares — essentially providing the financing for their sale — has ended, said Chuck Freadhoff, a spokesman for the fund group. American Funds was unable to find replacement financing beneficial to both investors and brokers, he said. B shares provide a back-end load, meaning that investors pay no sales charges unless they sell fund shares within a given period. Investors who redeem those shares in less than six years pay a sales charge. After eight years, Class B and 529-B shares for Section 529 college savings accounts convert to Class A and 529-A shares, respectively. Shareholders invested in Class B or 529-B shares will be able to hold those shares until they convert to Class A or 529-A shares. However, no additional investments into Class B or 529-B shares will be accepted on or after April 21. Instead, investments intended for Class B or 529-B shares will be invested in Class A or 529-A shares and subject to any applicable sales charges. Dividends and capital gains distributions may continue to be reinvested in Class B or 529-B shares until their conversion dates. In addition, shareholders invested in such shares will be able to exchange those shares for Class B or 529-B shares of other American Funds offering such shares until they convert. American Funds is advised by Capital Research and Management Co. of Los Angeles.

Latest News

SEC charges Chicago-based investment adviser with overbilling clients more than $2.5M in fees
SEC charges Chicago-based investment adviser with overbilling clients more than $2.5M in fees

Eliseo Prisno, a former Merrill advisor, allegedly collected unapproved fees from Filipino clients by secretly accessing their accounts at two separate brokerages.

Apella Wealth comes to Washington with Independence Wealth Advisors
Apella Wealth comes to Washington with Independence Wealth Advisors

The Harford, Connecticut-based RIA is expanding into a new market in the mid-Atlantic region while crossing another billion-dollar milestone.

Citi's Sieg sees rich clients pivoting from US to UK
Citi's Sieg sees rich clients pivoting from US to UK

The Wall Street giant's global wealth head says affluent clients are shifting away from America amid growing fallout from President Donald Trump's hardline politics.

US employment report reactions: Overall better than expected, but concerns with underlying data
US employment report reactions: Overall better than expected, but concerns with underlying data

Chief economists, advisors, and chief investment officers share their reactions to the June US employment report.

Creative Planning's Peter Mallouk slams 'offensive' congressional stock trading
Creative Planning's Peter Mallouk slams 'offensive' congressional stock trading

"This shouldn’t be hard to ban, but neither party will do it. So offensive to the people they serve," RIA titan Peter Mallouk said in a post that referenced Nancy Pelosi's reported stock gains.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.