What Are T Shares of Mutual Funds?

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Mutual funds normally have different share classes that investors can purchase. Some of these classes are differentiated by the load -- or upfront sales charge -- and annual fees that investors must pay. Others are differentiated by who can purchase them or how they can purchase them. T shares are one of the less common types and are used by different fund companies for different purposes.

Share Classes

The most common types of mutual fund shares are A, B and C classes. A shares are the most common and usually charge an upfront load when shares are purchased. In contrast, B shares usually charge their load when the shares are sold, and C shares may charge a small load or no load but have higher annual fees. Mutual fund companies can offer shares with just about any letter class, such as I shares for institutional investors or Z shares for the company's own employees.

Mutual funds normally have different share classes that investors can purchase. Some of these classes are differentiated by the load -- or upfront sales charge -- and annual fees that investors must pay. Others are differentiated by who can purchase them or how they can purchase them. T shares are one of the less common types and are used by different fund companies for different purposes.

T Shares

Some T shares are similar to C shares, according to Bankrate.com, in that they may have little or no load but higher annual fees. This makes these types of shares more appropriate for short-term investors, since the longer an investor owns them, the more she pays in fees. Thus the designation as T shares may merely serve to distinguish a particular set of fee rules from those that apply to the more common C shares.

Mutual funds normally have different share classes that investors can purchase. Some of these classes are differentiated by the load -- or upfront sales charge -- and annual fees that investors must pay. Others are differentiated by who can purchase them or how they can purchase them. T shares are one of the less common types and are used by different fund companies for different purposes.

Janus

The Janus mutual fund company uses its T class in a different way, after a 2009 reorganization of its funds and shares. At Janus, the T shares represent an equivalent to the company's most common shares -- but sold through a third party, such as another investment company. The company's D shares are its most common shares and represent the class sold directly by Janus. If you want to invest in a Janus fund and contact Janus directly, you would purchase D shares; if you want to invest in a Janus fund through another management company, such as Oppenheimer or Fidelity, you would purchase T shares.

Mutual funds normally have different share classes that investors can purchase. Some of these classes are differentiated by the load -- or upfront sales charge -- and annual fees that investors must pay. Others are differentiated by who can purchase them or how they can purchase them. T shares are one of the less common types and are used by different fund companies for different purposes.

John Hancock

John Hancock also uses its T class for a specific purpose related to a reorganization. When the John Hancock Technology Fund became the John Hancock Rainier Growth Fund, shareholders in the Technology Fund received T shares in the Rainier Fund. These shares have both a front-end load and an annual fee. This distinguishes former shareholders in the Technology Fund from later investors in the Rainier Fund.

References

About the Author

Eric Strauss spent 12 years as a newspaper copy editor, eventually serving as a deputy business editor at "The Star-Ledger" in New Jersey before transitioning into academic communications. His byline has appeared in several newspapers and websites. Strauss holds a B.A. in creative writing/professional writing and recently earned an M.A. in English literature.

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