Strong Funds Readies a Slew of Broker-Sold Funds - TheStreet

Strong Funds Readies a Slew of Broker-Sold Funds

Firm's set to break from the no-load tradition this fall.
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Strong Funds

, which traditionally offers no-load funds, will launch a family of broker-sold funds at the end of November.

The fund shop, which manages $45 billion in assets, will add new share classes that carry loads or sales charges on six existing funds and launch three new funds with sales charges on Nov. 30, according to a Tuesday company announcement. Just four months ago, the firm

scrapped plans to woo brokers by adding share classes with an annual 0.25% fees to pay their commissions.

The existing funds that will launch Advisor shares include some of the firm's better performers relative to their peers:

(STCSX)

Strong Common Stock,

(SEQIX)

Strong Equity Income,

(SMDCX)

Strong Mid-Cap Growth,

(SSMVX)

Strong Small-Cap Value,

(SIBNX)

Strong Bond and

(STGBX)

Strong Short-Term Global Bond. Strong's funds, including these six, will still be available without a load.

Strong Common Stock is currently closed to new investors, but it will open to new investors for those buying the new Advisor shares, according to the company's statement.

In addition to these six funds with Advisor share classes, the firm will also launch three new funds for its broker-sold fund family:

Strong Advisor Focus

,

Strong Advisor Aggressive High Yield

and

Strong Advisor Technology

.

The stock funds' Class A shares will levy a maximum 5.75% front-end load or sales charge, while Class B and Class C shares will carry maximum 4% and 1% back-end loads, respectively. Class L shares will charge a maximum 1% front-end load and levy a 1% back-end load on fund shares sold within 18 months of purchase.

Broker-sold bond funds typically have lower front-end loads than stock funds' and that will be the case here. The bond funds' Class A shares will carry a maximum 4.5% front-end load. Class B, C and L shares, however, will have the same pricing structure as the stock funds.

Several no-load or direct-sold shops have recently

launched loaded fund families to access the broker-sold distribution channel. Even top-selling

Janus

has

added annual

12b-1 fees to woo financial planners and brokers who charge asset-based fees, rather than traditional commissions.

Sales through the broker channel have remained strong despite the availability of no-load funds. As account balances have risen, many investors have sought advice and several big brokerages have offered fee-based pricing for those who object to paying commissions on each trade.

Despite the obvious bonus of reaching more investors, pitching funds to do-it-yourselfers and those who work with brokers can be a dicey proposition. Brokers are often hesitant to sell funds that are also available no-load, since their clients might be tempted to simply buy them cheaper on their own.

Although mammoth

Fidelity

has been able to sell in both markets, time will tell if smaller shops with less name recognition will win over the lucrative but fickle broker audience.