What is the difference between a class A share Roth IRA and a class B share Roth IRA?

[Guest gary6684]

Whatb is

[Demosthenes]

Class A shares generally have charge a fee for each deposit expressed as a % of the amount invested and lower annual, ongoing fees. (compared to B Shares)

Class B shares generally have a charge for amounts withdrawn expressed as a % of the amount paid out and higher annual, ongoing fees. (compared to A shares)

If you decide to buy, read the prospectus and compare to similar types of funds to determine if the fees are reaonable and that the funds returns justify the cost.

However, there a plenty of good funds out there that don't charge either type of fee and have low annual, ongoing fees. The fund screening tools at Morningstar, Quicken, and Money make the process quick and relatively painless.

[John G]

I am not sure if funds follow a specific pattern for back or front commissions... there are also funds with more than two classes of shares.

Basically, if anyone refers to shares with a "letter" you are not very likely to be looking at a no load fund. With lettters added.... read the description of each class carefully. More than a few people have fallen for the "no initial commission" followed by some mumbling about many years later. Those in the mutual fund industry, or their compensated third party salespersonal, should be ashamed about this method of selling back end loaded funds - - funds which have say 6% back end loads that decline 1% each year so they can truthfully say "no commissions a decade later". You won't care if the fund performs, but if it does not you get penalized a second time when you switch out. (see some of the prior messages about financial advisors putting folks in class B shares)

Unfortunately, some of the most hyped funds are the sad performers. Many years ago "Giftrust" was one of the darlings of the media. This fund required a high initial deposit and I believe you committed to staying with the fund for 18 years. Well.... after a few great years, performance sagged off. This fund has underperformed similar large cap funds in 7 of the last 9 years. It took some legal manuevers in I believe Missouri to give existing shareholders a chance to get out of the fund. What most folks read as Gift-trust turned out to me more rust.