B-shares are beginning to show signs of wear. At least three mutual fund advisors have recently decided to at least temporarily pull the plug on selling B shares. These include JPMorgan of New York, Quaker Funds of Valley Forge, Pa., and Bank of Hawaii of Honolulu, advisor to the Pacific Capital Funds.
Sales of mutual fund B shares and their related expense structure have come under increased regulatory scrutiny recently. Insiders speculate that the heyday of B shares is over. "Fund families dropping B shares is a good thing in the long run for investors," said Dr. Edward S. O'Neal, a professor at the Babcock Graduate School of Management at Wake Forest University in Winston-Salem, N.C. "In some cases, B shares appear to offer similar returns as A or C shares. But there are very few cases where B shares are clearly the best investment," he added.