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Time to Stop the Share-Class Madness

Confusing system gets worse instead of better.

Six years ago, Morningstar issued a detailed report ridiculing the fund industry's alphabet-soup of share-class names. The roster included not just A, B, and C shares but also D, R, and Z shares--and it was all Greek to ordinary investors. We called upon the industry to do the obvious: Make the share-class system simple and understandable.

Since then, the fund industry has advanced quite far in some respects. For example, you can instantly learn tons of information about a fund simply by going to its Web site. But the industry's bewildering system of selling funds remains intact. In fact, the system is getting more confusing by the day.