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Main Dictionary Y


Y-shares are a class of mutual fund shares available to institutional investors. This type of investors is usually used to refer to companies or combinations of them that accumulate funds from smaller participants in order to profit by investing in financial markets. Since Y-shares target a specific group of institutional investors, they tend to have a high entry threshold of $25,000. Limited load charge, coupled with a low total annual fee, are the undeniable advantages of this institutional share class.

Y-Shares explained

Y-shares are intended for sale only to institutions and have functions and specifics adapted to them, for example, a high entry threshold, thus the investment range for this class of shares is from $25,000 to $5 million. Investors can trade these shares without additional fees since the volume of sales for the current class of shares is not needed. 

At its core, Y-shares are shares available for purchase in bulk. As a rule, this class of shares does not have special rights and privileges, but is needed for institutions to make large investments in funds. Not in all cases, private investors are prohibited from buying this shares class, it is enough to be able to afford the minimum investment.

Y-Share special features

It is worth noting the Y-share advantage associated with a lower expense ratio on the whole compared to other share classes. This is because Y-shares are exempt from 12b-1 fees and other intermediary sales and distribution fees.

Most often, Y-shares are held in reserve for the institutional investor class (such as corporate or government pension plans and private equity funds), but in some cases, these investments may be available to retirement plan investors.

Funds without pension equity classes can afford pooled Y-share investments from pension plans that are collectively seeking investment in the fund. This can be very beneficial for shareholders of retirement age when they receive savings.

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