The alphabet soup of mutual-fund share classes can often be a source of confusion for investors, but a few rules of thumb, and a careful reading of mutual fund prospectuses, should help decipher most of the share class hieroglyphics.

Investors who buy mutual funds through a broker or other financial intermediary will usually have to pay some sort of sales charges for the advice that the broker gives them in choosing the funds. The different ways to pay these charges come in the form of Class A, Class B and Class C shares. (There are other classes of fund shares like Z shares, which are normally for employees, but let's stick with the basic share classes.)

With the popularity of no-load, low-expense funds, some investors feel they shouldn't pay a sales charge, which eats into long-term returns. Many no-load families like

Vanguard

try to help investors choose their own no-load funds by providing educational material. But for the uninitiated investor who doesn't have a financial adviser or much money to invest and doesn't mind paying for preliminary guidance, buying mutual funds through a broker is a decent way to go.

"For small investors investing very little money, brokers are willing to talk to them," says Mark Wilson, a certified financial planner with

Tarbox Equity

in Newport Beach, Calif. Though Wilson himself buys primarily no-load funds for his clients, he thinks it's fine for individual investors to purchase mutual funds through intermediaries, as long as investors are aware that the cost of compensating those intermediaries comes out of the bottom line.

Let's walk through the different share classes, and how the costs are structured.

Class A Shares

For A shares, investors will normally be charged a front-end load, or a one-time sales fee paid up-front that can range anywhere from 2% to 8%. Also, A shares, like all classes of mutual fund shares, charge annual expenses.

These expenses usually consist of a 12 b-1 fee that pays for the fund's marketing and distribution expenses, a management fee that the fund pays to its investment adviser for managing the fund and a fee for operating expenses. These expenses can vary according to the fund company, but experts agree that they're usually lower for an A share than a B or C share.

For long-term investors, many market watchers say the A shares are the best way to go because over a long period, the investor will have spent less thanks to the lower annual fees.

"People are often put off by the front-end load and avoid A shares because they don't want to pay that," says Peter Di Teresa, senior editorial analyst at

Morningstar

. "But after the front-end load, as long as the annual expenses are cheap, often it's the best way to go."

Class B Shares

Others note that the expenses of B shares, which have a "back-end load," or a contingent deferred sales charge when the investor sells his or her shares, can be comparable to A shares depending on the fund family's fees and when the investor sells the fund.

The back-end load for B shares is often slightly lower than the front-end load, but the annual expense fees are usually higher than those of A shares. The back-end sales charge usually declines the longer the shares are held and is often eliminated after a period of time (usually around six to eight years). At that point, B shares convert to A shares, meaning that investors start paying the lower expense ratio of the A shares and no longer have to pay the back-end load.

"Over a seven-to-10-year period, A and B work out to be consistently even," says Wilson. "If you're going to hold it for that time frame, it really doesn't make much of a difference."

However, that is not always the case. Investors should always carefully check out the fund's prospectus, which will normally chart out the expenses they should expect to pay over various time periods, using a hypothetical initial investment and a standard return.

Class C Shares

Meanwhile, investors with a shorter time frame, of around three years or less, could find a good bet in C shares, also known as "level load" shares.

C shares do not impose loads, but like B shares, they impose a higher expense ratio than A shares. Unlike B shares, C shares normally don't convert to A shares, so holders of these shares can go on paying this hefty expense ratio indefinitely. That's why it's only good to hold these share classes for a few years.

C shares also sometimes charge a fee if the holder sells them before a certain period is up, usually one year.

Which fund share class to pick depends not only on the investor's time horizon, but also on the fund company's fee structure, which can vary widely from fund company to fund company. If an investor is not satisfied with a fund family's hypothetical investment example provided in its prospectus, the

Securities and Exchange Commission

also has a handy fund fee

calculator that shows investors how much they can expect to pay in fees over their expected time frame. Investors can also see detailed fee information on Morningstar's

Web site.