Fidelity Investments has introduced its first mutual fund shares with back-end sales fees for eight of its Fidelity Advisor Funds, the company said.
The Class B shares offer a maximum back-end sales charge of 4%. The sales charge declines to zero depending on how long an investor owns the fund. The shares differ from the traditional Class A shares in which an investor pays a sales fee of 4.75% at the time of purchase.
The new class of shares became available July 1 on eight of the firm's 15 top-performing Fidelity Advisor funds. The Advisor funds are offered for sale through banks and by broker-dealers and financial planners.
"Class B shares are in demand among banks and brokers/dealers whose clients are long-term investors who do not plan to redeem shares in the near future, or cost-conscious investors who prefer to spread out their sales charges over an extended period of time," said Paul Hondros, president of Fidelity Investments Institutional Services Co., in a press release.
Two tax-exempt funds, the Advisor High-Income Municipal Fund and the Limited Term Tax-Exempt Fund, will offer the new shares, a spokeswoman said. There are no plans now to make the shares available on other Fidelity Funds.
The Class B shares also carry annual 12b-1 fees to defray the funds' distribution expenses and an annual shareholder service fee. The shares convert to Class A shares with reduced 12b-1 fees after six years.
The minimum investment for each class of shares is $2,500.
--Sharon R. King
