Who Still Offers B Shares & Best Bond Funds

or Register to post new content in the forum

126 RepliesJump to last post

 

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Feb 11, 2010 8:57 am

So I am new to the industry and keep running into people who despise the idea of taking almost 6% off their initial investment with A shares, yet also hate C shares higher annual fees which never decrease.  When I explain B shares, many people seem to like the idea, however many Fund Companies no longer offer them.  What are some solid Mutual Fund Families that still have B Shares?

Lastly, I need some good Bond Funds...Any ideas?

Feb 11, 2010 9:09 am

Change your forum name. You can't be a Big Cheese until you have earned it!

Feb 11, 2010 9:14 am

haha nice touch mr. cheese

Feb 11, 2010 9:33 am

Do your clients a favor and tell them the truth about B-shares. Run a hypo on any B-share, and compare it to an A-share. Ask them which performance they prefer.


If you plan on having a bit more active role in the process, i.e. moving from fund to fund, then suggest C-shares so they aren't always getting killed with the up front sales charge.
 
I explain how all the shares work, give the numbers, talk about my investment philosophy, then tell them to make the decision. If they ask for help, I do the math for them. I have yet to find a situation where a B-share makes sense for the client.
Feb 11, 2010 9:35 am

Really? I did a hypo on FINRA's website and after 10 years, B shares beat A and C every time...It is not by much, but regardless of the rate of return I selected (5,6,7% annually) the investor always had more money with B shares

Feb 11, 2010 9:42 am
Feb 11, 2010 9:43 am

Did I do something wrong here or is there something about B shares I don't know here?

Feb 11, 2010 9:45 am

6%?  You do understand breakpoint rules, don't you?  It's actually pretty rare for anyone to pay the full load.  And those folks typically aren't great clients anyway.  If they're complaining about paying you 5.7% for the next 10 years, then they're better off buying an asset allocation fund from Vanguard and letting it ride.  Your book with thank you in the long run.      

 
If you have to sell B shares look at MFS, Goldman, Lord Abbett, Van Kampen (soon to be AIM/Invesco), or Oppenheimer.  I'm sure there are others out there, but many of the big companies have lost their financing on the B shares, so they stopped doing them. 
 
You're going to have to be more specific on the bond fund thing.  Are you looking for a total return bond fund, high yield fund, government bond fund, foreign bond fund?  Be more specific and you'll get some better responses.  
 
Oh yeah, stop using the FINRA website.  Figure out how to use your firm's hypo system.  If you can't have your internal wholesaler do it for you.  Morningstar shows the 10 year ending numbers (as of 1/31/10) on the MFS funds you used as $15,476, $15,432, and $15,416 for the A, B, and C shares respectively.  So, a $60 difference over a 10 year time frame between the A and C.  Less for the B.  The 5 year hypo isn't even close.  C share wins hands down.  Plus the flexibility of the C share is a big draw.  Plus you get paid better in the long run on the C share.  So, for $6 a year in performance you get a client without the handcuffs (commissions paid or CDSC fees), an FA who has a regular stream of income who is happier about servicing that client with $10K, and no headaches from your compliance officer when in 3 years you want to switch out of XYZ A share because the money manager has changed or the entire fund family got overweighted in financials or the landscape has changed and it's time to move to bonds.
 
 
Feb 11, 2010 10:00 am

Maybe i'm off here, but I have been recommending B shares for people just wanting to open a roth IRA and just wanna put in 5k for 1 or 2 years and then just let it grow...Because it is such a small amount, I've been telling them about B shares.  Thank you for those names/funds.

As for the Bond Funds, I guess I am primarily looking for some good generic bond funds and maybe 1 or 2 extraordinary performers that may be a little more risky or international etc.

Feb 11, 2010 10:01 am
bigcheese09:

Which performance do you prefer SometimesNowhere?

 
You are a clown. You are stealing screen names and now ripping on guys who actually know the business? Get bit and go sell your B shares at Fidelity.
Feb 11, 2010 10:11 am

I agree with Spiff and Cheese.  B shares are better for small amounts for younger people, A shares are better if you hit breakpoints.  Unfortunately, B shares are going away, so I would not bother selling them.


This is just one reason our industry is so fukced up.

Feb 11, 2010 10:17 am
FTAZX,FBAZX,FBEIX,FISEX,TEBBX,TEBIX,TESIX,FMUBX
 
Do yourself a favor and run those in Morningstar, it's a random grab bag of Franklin funds. Even if you buy those in piker amounts with a full A share sales charge in 10 years every one of the A's outperforms the B's.
 
By the way, if you look at the ACTUAL performance return instead of a return you randomly select, the numbers on your selected fund are better for the A too. Look at the report and tell me "which performance you prefer". 
 
Then do us all a favor and jump off a bridge and kill yourself.
Feb 11, 2010 10:44 am
bigcheese09:

Maybe i'm off here, but I have been recommending B shares for people just wanting to open a roth IRA and just wanna put in 5k for 1 or 2 years and then just let it grow...Because it is such a small amount, I've been telling them about B shares.  Thank you for those names/funds.

As for the Bond Funds, I guess I am primarily looking for some good generic bond funds and maybe 1 or 2 extraordinary performers that may be a little more risky or international etc.


Where do you work?
Feb 11, 2010 11:13 am

It has to be EJ

Feb 11, 2010 11:34 am

Here's an interesting thought:

 
If B shares are going to be eliminated pretty soon across the board, would it benefit the client to buy all B shares in the meantime in anticipation that they will be converted to A shares as soon as that specific fund family decides to make the change?  I have a client that had Columbia B shares until this past August and they converted automatically to A shares w/out charging him any fees.  Wouldn't doing this allow the client to avoid paying a front-load, the majority of the CDSC, and still pay us good?
Feb 11, 2010 11:51 am

In my very limited experience with B shares from companies no longer offering them (American and Franklin) they didn't immediately end the B share fund. They simply stopped allowing new sales and are allowing the existing shares to eventually run their course.

Feb 11, 2010 11:56 am

Did those Columbia funds reach the end of the CDSC?  All Col. B shares convert to A after the CDSC.


And I think Bigsneeze09 should just sell his customers all no loads...

Feb 11, 2010 12:10 pm
KensLoveChild:

Did those Columbia funds reach the end of the CDSC?  All Col. B shares convert to A after the CDSC.

 
Ahhh...just checked.  They actually eliminated the whole fund and combined it with a similar fund that no longer had B shares, so they put it in the A share. 
Feb 11, 2010 3:20 pm

In regards to Bond Funds I like -- Templeton Global Bond, JPMorgan Core Bond, Pimco Low Duration and Total Return

Feb 11, 2010 3:29 pm

Who ripped  who Ron?