Question

XYZ Canadian growth fund sells three classes of shares. Class A shares charge back end load scheduled as below:

If you sell: within one year of buying 6%
within two years of buying 5.5%
within three years of buying 5.0%
within four years of buying 4.5%
within five years of buying 3.0%
within six years of buying 1.5%
after six years 0%

Class B shares charge front end load of 2%.
Class F shares do not charge front end load and back end load.
The MER for Class A, B, F is 2.48%, 2.28%, and 1.13% respectively.
The TER is 0.17% for each of three classes of shares.

You invested $1000 in each of the three classes at the beginning of 2016. Below is the return information from 2016 to 2019 provided by the fund: (returns are after expenses have been deducted)

2016 2017 2018 2019
Class A 13.6% 15.38% -9.24% 27.64%
Class B 13.83% 15.64% -9.05% 27.91%
Class F 15.15% 16.94% -8.00% 29.37%
  
Please find out how much money you receive for each class if you sell them at the end of 2019 (within 4 years of buying). (6 points)

Answer 1

	Particulars	Class A	Class B	Class F
(i)	Amount Invested in $	1000	1000	1000
	Front end Charges		2%
(ii)	Front end charge expenses		20
(iii)= (i)-(ii)	Net investment	1000	980	1000
	Return % 2016	13.6	13.83	15.15
(iv)	Return in $	136.00	135.53	151.50
(v)= (iii)+(iv)	Investment amount at the end of 2016	1,136.00	1,115.53	1,151.50
	Return % 2017	15.38	15.64	16.94
(vi)	Return in $	174.72	174.47	195.06
(vii)=(v)+(vi)	Investment amount at the end of 2017	1,310.72	1,290.00	1,346.56
	Return % 2018	-9.24	-9.05	-8.00
(viii)	Return in $	-121.11	-116.75	-107.73
(ix)= (vii)+(viii)	Investment amount at the end of 2018	1,189.61	1,173.26	1,238.84
	Return % 2019	27.64	27.91	29.37
(x)	Return in $	328.81	327.46	363.85
(xi)=(ix)+(x)	Investment amount at the end of 2019	1,518.41	1,500.71	1,602.69
	Back end load %	4.5
(xii)	Back end load expenses in $	68.33
(xiii)= (xi)-(xii)	Net Amount receivable of each class	1,450.09	1,500.71	1,602.69