Just as the mutual fund industry appears to be getting its jargon under control, along comes John Nuveen & Co. to stir up the alphabet soup again.

Fund companies use the letters A, B, C, D, Y, and Z as shorthand to describe the varied pricing structures of mutual funds.

Two months ago, the industry's trade group issued guidelines to encourage all companies to use the same letters for the same classes of shares.

Now Chicago-based Nuveen is revamping the pricing structure for its tax-free funds, and introducing R shares in the process.

That's right - R shares. (This is not a typo.)

Nuveen's R shares carry an up-front sales fee of 4.75%, and allow customers to reinvest their dividends automatically.

Nuveen has long offered funds with this pricing pricing option, but it used to call them A shares.

However, the company recently introduced a new pricing scheme for its front-end load funds and bestowed the A shares label on them. Nuveen's new A shares carry a 4.5% up-front fee, plus an annual charge of 0.25% to cover fund marketing and advertising costs.

So why R shares? Nuveen "selected that letter because they are essentially reinvestment shares for current shares," explained Jeffrey Kratz, vice president and manager of promotions.

In other words, the change was made to ensure that Nuveen's current investors won't have to get used to a new pricing regime. "We can't all of a sudden say, 'Now you've got a different deal,'" said Jerome S. Contro, manager of the national bank division at Nuveen.

If Nuveen's folks want to invent new terminology, there's no one to ruin their fun. The fund industry's nomenclature guidelines are strictly voluntary.

Even so, Nuveen's new R-shares label had fund industry officials scratching their heads.

"This is the first I've heard of it," a spokesman for the Investment Company Institute said.

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