What are ISINs for mutual funds and fund classes? – Market Research Telecast


Mutual funds typically have different classes of shares, even though you are investing in the same fund portfolio. But investors should consider, although it is the job of the commercial advisor, to indicate or select the best class depending on the amount to invest, since the differences in the commissions charged are significant.

But before this, it is worth mentioning that each class in the background has a different identifier, in addition to the letters, and is the RAY. The acronym ISIN stands for International Securities Identification Number, is a code that has the purpose of identifying univocally and internationally the transferable securities, including funds. The National Coding Agencies are responsible for assigning the ISIN code in each country, and it consists of 12 alphanumeric characters.

But in addition, investment funds are classified as lessons because there are for retail, institutional, private banking client and also clean classes (that do not have commissions or incentives in their marketing and therefore the commissions are cheaper) distribution classes or accumulation, classes with currency covered or not, and others that will be seen in the note. And each class has its own ISIN that will be the identifier that we should take into account when buying, transferring or selling a fund.

Generally what we will see is a product with the same name and only the final part changes with some letters. That depends on whether the commissions are higher or less and that the minimum subscription (purchase) amount is higher or lower. It will be more intuitive if we do it via an example. We go to the Singular Bank website and see this:

In the first case, it is the fund BGF World Technology A2 EUR: it is a fund of the management company BlackRock Global Funds (BGF), is a fund that invests in technology worldwide (although to know more it would be convenient for the investor to read the investment philosophy where he will see that it says “The World Technology Fund seeks to maximize total profits. The Fund invests globally, at least one 70% of its total assets are in ordinary shares of companies whose predominant economic activity is in the technology sector. ”Well, the class here would be A2, and in this case the class is in euros, because the name includes EUR. But yes The investor goes to the manager’s website and will verify that there are several classes:

At Prospectus in the background it is described for whom each class is directed. A is for all investors, while class AI is only available in Italy and through specific distributors; to class C are for customers of some distributors; class D are intended for providers of independent advisory services or discretionary management…. and classes I, J and X are only for institutional investors, etc. But We repeat, that it is the banker or the financial advisor who must select the class that best suits the client, but it doesn’t hurt to know. In addition, in this same document it establishes the minimum subscription, being $ 5,000 for all classes except AI, where it is 25,000 and the D where it is 100,000, etc … Another very intuitive way is when we see the termination BP, which is the class for clients of Bhip Privada.

On the other hand, there are some classes called “clean shares” or clean classes that do not back commissions with distributors / marketers, and therefore are the lowest commissions for the end customer. Although it is a problem that not all managers use the same nomenclature to identify the classes of the funds, much less for the clean classes. But there are platforms (one could be Myinvestor) that offer clean classes at many mutual funds and for retail clients.

It is worth reiterating that in order to avoid being “sold for a hare” it is important to try to read “Key Investor Information”, the fund’s prospectus and the fund’s prospectus.

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