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Class 529-A shares have lower annual expenses than Class 529-C shares. To keep long-term investors from paying higher fees over time, Class 529-C shares, including shares acquired by dividends, convert to Class 529-A shares after an investor has owned them for 5 years.
Class C shares are level-load shares that don't impose a sales charge unless you sell too soon after your purchase (usually a period of a year). Instead, mutual funds charge an ongoing annual fee. C shares are probably best for short term investors of beyond one year and no more than three years.
Class C shares don't impose a front-end sales charge on the purchase, so the full dollar amount that you pay is invested. Often Class C shares impose a small charge (often 1 percent) if you sell your shares within a short time, usually one year.
With B-shares, an investor pays a sales charge when they redeem from the fund, known as a back-end sales load or a contingent deferred sales charge (CDSC). The CDSC decreases over time, and after a certain period is eliminated, converting B-shares into a type of A-share.
Class A shares involve paying a fee when you purchase your shares. Class B shares impose a fee when you sell your shares. Class C shares impose a fee while holding the shares, such as 0.5% of the value of the share per period.
Class C shares of a Fund acquired through automatic reinvestment of dividends or distributions will convert to Class A shares of the Fund on the Conversion Date pro rata with the converting Class C shares of the Fund that were not acquired through reinvestment of dividends or distributions.
Putnam Investments ? ETFs, Mutual Funds, Institutional, and 529. Putnam is the only fund family ranked in the top 10 by Barron's across all time periods. Barron's list of Best Fund Families, 2023.
Starting on or about January 22, 2021, Class C shares will be eligible for automatic conversion into Class A shares on a monthly basis approximately eight years after the original date of purchase.