Share classes and breakpoints

ARTICLE TAKEAWAYS

  • Share class overview
  • How to reduce the sales charge for Class A shares
  • Net asset value (NAV) policies

Overview of available share classes

American Funds offers a variety of share class options to accommodate investors’ objectives and timelines. Compensation for the financial professional varies by each share class.

Class A, 529-A and ABLE-A shares

Class A shares are sold with an upfront sales charge. The sales charge is reduced for larger purchases and account values.

Note: The American Funds U.S. Government Money Market Fund A share does not have an upfront sales charge; however, shares that are exchanged from the money market fund into other A share funds will be charged the appropriate sales charge at the time of the exchange.

View the full list of A share breakpoints at Share class pricing and details.

Reducing the sales charge for A shares

American Funds offers the following options for reducing the upfront sales charge for accounts with A shares:

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Investors can reduce upfront sales charges with larger purchase amounts and account values. Investors or financial professionals should notify American Funds when a purchase is eligible for a reduced sales charge; otherwise, the maximum sales charge may be applied.

An investor can add the value of American Funds share classes already owned to new purchases to qualify for a reduced sales charge on Class A, 529-A and ABLE-A share purchases. Exceptions include direct purchases of American Funds U.S. Government Money Market Fund shares and assets in Class 529-E shares, Class R shares and unit classes.

In determining sales charges, an investor can combine their American Funds and American Legacy account values with those of their spouse or spouse equivalent (if recognized by law) and children under 21 or disabled adult children with an ABLE account. Some exclusions may apply. Refer to a prospectus for full details about the American Funds aggregation policy.

Combining the simultaneous purchases of two or more American Funds of any share class (including, upon request, purchases for gifts) — as well as holdings in American Legacy accounts established on or before March 31, 2007, CollegeAmerica® or ABLEAmerica® — is another way to reduce Class A, 529-A and ABLE-A sales charges. This applies to direct fund purchases into any accounts of the investor and their immediate family. Exceptions include direct purchases of American Funds U.S. Government Money Market Fund shares and assets in Class 529-E shares, Class R shares and unit classes.

An investor can reduce the sales charge paid on Class A, 529-A and ABLE-A share purchases by establishing a statement of intention (SOI). An SOI allows an investor to combine fund purchases of share classes they intend to make over a 13-month period to determine the applicable sales charge. An SOI can be established by completing the Statement of Intention (SOI) form.

If an investor wants to buy shares as a gift, the current value of their holdings can be used to determine the sales charge on the gift purchase. Review Gift of shares for more information.

For complete guidelines on how your client can purchase A shares for a reduced fee, share class FAQs and information on compensation, refer to Reducing sales charges on Class A, 529-A and ABLE-A shares.


Net asset value (NAV) policies

American Funds has the following NAV policies:

Investors may reinvest proceeds from a redemption, dividend payment or capital gain distribution without a sales charge in any of the American Funds within 90 days of the redemption, dividend payment or distribution. Review Right of reinvestment for more information.

Rollover investments to Capital Bank and Trust Company (CB&T) IRAs from American Funds RecordkeeperDirect® and PlanPremier® retirement plan recordkeeping programs will be made into A shares at NAV.

Assets from other retirement plans that are currently invested in American Funds can be invested in Class A shares at NAV when rolled into an American Funds IRA with CB&T as the custodian. A copy of the statement showing the American Funds assets and a letter of instruction requesting NAV is required at the time of the purchase.

Rollovers invested in Class A shares from retirement plans will be subject to applicable sales charges.

Incoming rollovers from an external 529 account into a CollegeAmerica 529-A share or ABLEAmerica ABLE-A share account are invested at NAV.

Our pricing policy allows eligible individuals to invest in Class A, 529-A and ABLE-A shares without incurring sales charges or commissions.

An eligible person is defined as:

  • You (a registered representative or assistant directly employed by such representative, IAR or full-time employee of the dealer/RIA firm/bank)
  • Your spouse (or equivalent if recognized under local law)
  • Child(ren) and/or parent(s)
  • Step and adoptive relationships (child and parent)
  • Son-in-law and daughter-in-law
  • Your parents-in-law are included if you, your spouse (or equivalent), children or parents are listed in the account registration. Please reference the prospectus for more information.

Not all dealer firms allow their employees to participate; contact your home office to confirm your firm’s eligibility.

To establish the NAV purchase privilege on an account, complete the Sales Charge Exemption form. The form must be signed by an authorized officer or individual other than the registered representative/IAR requesting the NAV privilege.

Class F shares

Many dealer firms offer fee-based programs that allow investors to purchase mutual funds for an asset-based fee instead of paying commissions or sales charges. Class F-1 shares are primarily available through certain financial services platforms that support self-directed investors. Class F-2, F-3, 529-F-2, 529-F-3 and ABLE-F-2 shares are used in fee-based programs at most firms.

Class C shares

The C share and 529-C share classes do not have an upfront sales charge; however, a contingent deferred sales charge of 1% may be applied on shares redeemed within one year of purchase.

Class 529-E shares

This share class is available only through employer-sponsored 529 plans. Class 529-E shares do not have an upfront or contingent deferred sales charge.

Class R shares

The R share class provides flexibility in retirement plan pricing. The eight share classes are differentiated by the ways plan sponsors and participants pay for plan services.

For additional details on share classes, expenses, minimums and restrictions, review Share class pricing and details or the Resource Guide.

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The guidelines and procedures provided in the Account Resource Center may not apply to networked accounts or accounts not directly held by American Funds. The guidelines and procedures provided also apply only to those retirement accounts or Coverdell ESAs invested in American Funds with Capital Bank and Trust Company (CB&T) as custodian. The guidelines and procedures provided in the Account Resource Center do not apply to plans held in our retirement plan solutions — PlanPremier, PlanPremier-TPA or RecordkeeperDirect. Information on the Account Resource Center may change periodically, and previously printed information may not be current. Please refer to capitalgroup.com for the most current information available.

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