Typically, mutual fund companies offer multiple types of shares. Some companies offer no-load funds and others offer load funds. Load fund companies offer retail shares with different load structures, such as “A”, “B”, and “C” being the most common ones. Type “A” is a front-load fee – the investor gets charged a fee before actually being invested in the fund. Type “B” is a deferred-load fee – the investor gets charged at the end of a term. Type “C” is a constant-load fee – the investor gets charged a sales fee throughout the holding period of the fund.
Then, there are no-load shares which are slowly becoming the norm in the mutual fund industry. They carry no 12b-1 fees either. No-load shares typically have retail and institutional share types. Some companies have more than one depending on the amount of money you have available to invest. For example, Vanguard has five different share types (investor, admiral, signal, institutional, institutional plus). Each has a different purchase minimum and an expense ratio. Normally funds with higher minimums have lower expense ratios.
All of these minimums apply to retail investors. If you are under the advisory of a registered investment advisor, all of the minimums are typically waived. However, the expense ratio is still enforced. Normally, expense ratios for institutional shares range somewhere between 5 and 100 basis points. That is much lower compared to retail shares which charge investors 25 to 250 basis points.