Maureen R. in Holland, Pa., thought she was doing the right thing when she established brokerage accounts for her four kids and put the...

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Maureen R. in Holland, Pa., thought she was doing the right thing when she established brokerage accounts for her four kids and put the money into the Class C shares of a mutual fund.

Now she’s not so sure. Maureen met with a different financial adviser, who suggested that the accounts for the kids — now 13, 11, 10 and 6 — should be in Class A shares and that the first adviser had made a mistake.

Two advisers with two opinions creates one confused customer. But Maureen is far from alone.

Mutual-fund alphabet soup can leave a bad taste in your mouth, even when you have made the “right decision.”

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That’s because there are so many permutations that what appears right doesn’t always come out best when you work the numbers.

Before you can see how C shares could be right or wrong for Maureen, here’s a primer on the ABCs of mutual funds.

A is for “all at once.” With Class A shares, the investor pays a traditional front-end sales load, usually lopping between 3 and 6 percent off the top to pay for the services of the adviser.

Of broker-sold share classes, however, A shares carry the lowest continuing costs, which tends to make them the best option for long-term investors.

B stands for “back end.” Class B issues carry a back-end load, payable if you exit within a set period, usually the first four to six years.

C stands for “Chuck hates them,” but I confess to mostly disliking C shares because I take a long-term perspective on buying funds, and this class is the most expensive for a buy-and-hold investor.

Class C shares have no upfront sales charge and may have a small deferred load if you sell the fund in the first year or two. In exchange for the reduced sales fees, the fund carries higher costs for life.

As a general rule, C shares tend to be the best choice for an investor looking for flexibility or who doesn’t expect to stick around too long.

That’s why things get confusing for an investor like Maureen.

Using the Mutual Fund Cost Calculator program developed by the U.S. Securities and Exchange Commission — and available free at (click “more” under “Investor Information”) — a comparison of costs shows why.

Say someone invested $10,000 today and expected to leave the money in place for a decade, getting an 8 percent return. The cost of investing in Morgan Stanley Aggressive Growth A — the sum of all fees paid plus any earnings surrendered by paying sales charges — is $3,769. At the end of 10 years, the investor would come away with $17,819.

By comparison, the same investor putting the money into the same fund’s Class C would have paid $4,164 in total costs and come away with $17,425.

Drop the holding period down to five years or less, however, and the C shares come away with an edge.

Ultimately, the lesson is that costs matter, and that the right choice may depend on personal circumstances as much as it does the set-up of a fund’s class structure.

Chuck Jaffe is senior columnist at CBS Marketwatch. He can be reached at or Box 70, Cohasset, MA 02025- 0070.