broker-sold funds to its lineup.
The board of Denver-based Invesco Funds Group is voting this week on whether to offer C shares on certain funds beginning in January. Investors typically do not pay up-front com-missions on C shares, but they are charged higher expense ratios, a price many are willing to pay for advice.
The move could appeal to brokerages and other financial intermediaries partly because C shares typically pay them a trailing fee. Invesco offers 33 no-load funds and has about $30 billion of assets under management. Its sister company, Aim Management Group of Houston, is one of the largest sellers of mutual funds through banks.
"The true no-load market place has been in decline for a while," said Gary S. MacDonald, senior vice president of new business development for Funds Distributor Inc. of Boston.
The move by Invesco would follow on the heels of other fund companies.
Mellon Financial Corp. of Pittsburgh, for example, said recently that it would replace the no-load fee structure on most of the Dreyfus Founders Funds. Nonbank fund families such as Stein Roe Mutual Funds and Scudder Funds have also switched some of their portfolios, and others are considering such a move.
Brokers want to meet clients' needs, but "we can't keep the doors open if we're not compensated," said Curt Anderson, president of the brokerage at First Busey Corp. of Urbana, Ill.
A spokeswoman for Invesco declined to comment, but the details were laid out two filings with the Securities and Exchange Commission.
Invesco said in the SEC filings that it would offer C shares in the following funds: Blue Chip Growth; Dynamics, a mid-cap growth portfolio; Endeavor, a multicap portfolio; Growth and Income; Small Company Growth; Value Equity; S&P 500 Index Fund; Equity Income; Balanced Fund; and Total Return.
The funds would require an initial investment of $1,000, with limited exceptions, and carry a maximum deferred sales charge of 1% for shares held 13 months or less.
Nonetheless, a switch to load funds is not always successful, said Russ Kinnel, mutual fund editor for Morningstar.com, which provides financial analysis on stocks and mutual funds. He said that Pilgrim Baxter & Associates planned to offer load funds a few years ago, but changed its mind because of market conditions.