A-Share Filter

By Dr. Felix Kleinstein

Question from respected colleague:

I use load-waived A-Shares in client accounts. Is there a filter that will eliminate all other share classes in my scenario results?

Answer from Felix:

Yes there is, but it’s not as obvious as the Distinct Portfolio filter. (“Tips from the Klein Bottle”- The KleinPost Q3- 2007) As you’ve probably already seen, especially if you are faithfully reading The KleinPost as you should, the Distinct Portfolio filter eliminates all but one share class for each fund; but it is not based on specific classes, returns, or expense ratios. No, the Distinct Portfolio filter looks for the share class with the longest track record. That ends up being different classes for different funds, so that won’t help you very much in your quest for A-Shares.

The next thing you might think of is a filter such as Front Load, Deferred Load, or Actual 12b-1 Fees. For these filters, you simply enter “0” for Maximum to limit your scenario to no-load/no-12b-1 funds, or you can enter a different value to cap the expense. So, these can help you eliminate or constrain load funds and those carrying 12b-1 fees… but I get so excited about K⁴’s power, I digress.

When you want to limit your scenario to one share class, A-Shares, the trick is to realize how A-Shares work. Although you can use them load-waived, this class of funds does have a front-end load. Aside from the Morningstar Return, the statistics in K⁴ Fund Selection don’t distinguish between regular A-Shares and their load-waived counterparts. In other words, K⁴ treats all A-Shares as having front-end loads; and that’s how you can filter for them.

Simply select the Front Load filter and enter “.01” as the Minimum. This means that any fund that doesn’t have at least this minute amount as a front-end load will be eliminated from your results. While there may be a few fund families with an odd share class having a front-end load that is not an A-Share, the overwhelming majority of your results will now be A-Shares. You can generally confirm this in the fund name on the Results page or failing that, from the Purchase Information on the fund’s Profile Report. So, you can now find your A shares, and I get an A+ for answering your question.

 

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