Mutual fund `B' shares attractive for the long haul

The Ticker

September 26, 2001|By JULIUS WESTHEIMER

HAVE YOU heard of mutual fund "B" shares? Although not well-publicized, they are attractive for long-term mutual fund buyers.

"B" shares have no front-end sales charge, or "load," but carry a fee if you redeem shares within a certain number of years," says Mutual Fund Education Alliance newsletter.

"This `back-end load' declines every year until it disappears, usually after five years. `B' shares also carry a 12b-1 marketing fee typically higher than the 12b-1 fee of `A' [front-end load] shares," the newsletter says.

BIG DIFFERENCE: "An extra $500 in a tax-deferred IRA makes a big difference in retirement income," says Dee Lee, financial planner. "Starting in 2002, people age 50 and older can invest $500 more in an IRA each year than younger people can. Over 15 years, at a 9 percent annualized rate of return, the extra $500 a year adds up to almost $15,000."

WATCHING WALL STREET: "The prudent approach now is not to jump into the market until stocks begin to advance significantly. That ... won't occur until about two weeks after the market bottoms." (Cabot Market Letter)

"Now stocks may be close to a bottom," states Michael Strauss, senior economist, Commonfund. "As bad as things are now, we may end up producing a better economy a year from now with increased government spending and lower interest rates."

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