In an effort to keep up with its competition, the GE Funds managed by GE Investment Management of Stamford, Conn. is realigning the share classes on its 16 funds and is lowering the 12b-1 fees on its A shares. The changes reflect GE's desire to make the current share class lineup less confusing to current investors and more competitive in the marketplace, said a GE spokesperson.
Beginning September 17th, the current 12b-1 fee of 0.50 percent applicable to investors of A shares will be cut in half to 0.25 percent. C shares, which previously had no initial sales charge but carried a 0.25 percent 12b-1 fee will be renamed A shares. The converted A shares mean shareholders will now have to pay a front-end sales charge of up to 5.75 percent on GE's equity funds, and up to 4.25 percent on purchases of fixed-income funds. These sales charges will be waived for GE employees, retirees and their families.
B share investors will also see the benefit of the discounted 12b-1 fee when their shares convert to the new A shares. Currently, GE's B shares are subject to a contingent deferred sales charge which varies with the length of time shares are held and carry a 1.00 percent 12b-1 fee. Class D shares, shares without fees designated for institutional investors, will become Y shares.
The initiative is part of GE's recent attempts to win significant market share, said Adam Rochlin, vice president of retail products for GE.
"We don't just want to compete, we want to win," he said.
While the retail GE Funds, with a combined $4.4 billion under management, have kept a relatively low profile in the marketplace, GE is not a novice in the money management business. Its flagship fund group, the 64-year-old Elfin Funds, now with $5 billion under management, is only available to GE employees.