Choosing the Most Cost-Effective Share Class
When you invest in a Van Kampen mutual fund, you may have the option of investing in different share classes (e.g., A, B, C, I and R) offered by the Fund. The share class that is most appropriate for you will depend on many factors, including the length of time you intend to maintain your investment in the fund, the size of your investment, the expenses you’ll pay over the lifetime of your investment, and whether you qualify for sales charge discounts. Choosing the most cost-effective share class for your investment is paramount!
To determine the optimal share class for your investment, you and your financial advisor should review the applicable expenses associated with each share class for which you are eligible. These costs may include upfront commissions, back-end sales charges, and annual operating fees. In addition to reviewing these costs, you should also determine your eligibility for reduced sales charges because of quantity discount privileges. For example, if you already own more than $50,000 of any share class of any Van Kampen Fund, you may be eligible for sales charge discounts on future mutual fund investments. You must inform your financial advisor or the transfer agent at the time of future purchases in order to take advantage of the sales charge discounts that may be available to you.
Take ownership of your investment decision. Maximize the value of your investment, by asking your Financial Advisor the right questions. These questions may include:
- Which share class is most appropriate for me considering the amount of my investment and my anticipated time horizon?
- Can you document why the share class you recommended is more appropriate for me than the other share classes?
- Would I be entitled to any sales charge discounts if I invested in another share class?
- How much will you be paid for selling me this class of shares as compared to the others?
The share class descriptions below provide a brief summary of the differences between Van Kampen’s mutual fund share classes and guide you on evaluating the share class that is most appropriate for you. Refer to the Fund prospectus for additional detail.
When you invest in Class A shares, your cost includes a one-time up front sales charge deducted from your initial investment. Typically, this share class is attractive to investors who plan to hold shares for the long-term and prefer to pay for the sales charge up front.
Under certain circumstances, Van Kampen may reduce or waive this sales charge because of quantity discount privileges. These privileges apply to individual purchase transactions, cumulative holdings, and anticipated investments. Consult with your Financial Advisor for additional detail regarding Volume Discounts, Cumulative Purchase Discounts, and Letters of Intent.
Before purchasing Class B Shares, you should determine whether this investment is in your best interest, and not just in the interest of your broker or advisor who may receive higher commissions from the sale of Class B shares compared to other share classes.
When you invest in Class B shares, you do not pay an up-front sales charge but you may incur higher expenses over the lifetime of your investment as compared to Class A shares. In addition to the higher expense ratio, you may be required to pay a contingent deferred sales charge (CDSC) if you redeem your shares during the first several years of ownership. Investors who purchase Class B shares cannot take advantage of breakpoint discounts available on large purchases of Class A shares.
Generally, Van Kampen will not accept a purchase order for Class B Shares in the amount of $100,000 or more. A different share class may be more suitable for an investment for this dollar amount or greater. Consult with your Financial Advisor to determine the share class that best suits your investment objectives.
With Class C shares, you do not pay an up-front sales charge, but you may pay a one percent charge if you redeem shares within one year of purchase. Like Class B shares, Class C shares may carry a higher expense ratio than Class A shares. However, Van Kampen's Class C shares never convert to Class A shares. Investors who have a shorter time horizon with respect to share ownership usually prefer Class C shares.
Van Kampen will not accept a purchase order for Class C Shares in the amount of $1,000,000 or more. A different share class may be more suitable for an investment of this dollar amount or greater. Consult with your Financial Advisor to determine the share class that best suits your investment objectives.
Class I Shares are offered without any sales charges on purchases or sales and without any distribution (12b-1) fee and service fee. Class I Shares are available for purchase exclusively by investors through (i) tax-exempt retirement plans with assets of at least one million dollars (including 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase plans, defined benefit plans and non-qualified deferred compensation plans), (ii) fee based investment programs with assets of at least one million dollars and (iii) institutional clients with assets of at least one million dollars.
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Class R Shares are offered without any sales charges on purchases or sales. Class R Shares are subject to distribution (12b-1) fees and service fees as described in the prospectus. Class R Shares are available for purchase exclusively by investors through certain tax-exempt retirement plans (including 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans, defined benefit plans and non-qualified deferred compensation plans) held in plan level or omnibus accounts.
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