# Y-Share: What It is, How It Works, Example

## What Is a Y-Share?

Y-shares are an [institutional share](https://www.investopedia.com/terms/i/institutionalshares.asp) class offered in open-end mutual funds. Targeting institutional investors, the share class often has a high minimum investment, beginning at approximately $25,000. This share class also offers the benefit of waived or limited load charges and lower comparative total annual fees.

### Key Takeaways

*   A Y-share is an institutional share class offered in open-end mutual funds—having a high minimum investment—generally $25,000 or more.
*   These shares offer a limited or waived load charge or lower comparative total annual fee.
*   Y-shares are not associated with intermediary sales charges and usually do not pay any distribution fees or 12b-1 fees from the fund’s expenses, allowing their expense ratios to be lower overall than other share classes.
*   While Y-shares are typically reserved for institutional investors, they may allow investment from retirement plan investors in some cases.
*   Funds without retirement share classes may allow pooled fund investments in Y-shares from retirement plans that collectively seek investment in the fund.

## How Y-Shares Work

Y-shares are an alternative to [I-shares](https://www.investopedia.com/terms/i/institutionalshares.asp) which are in the most commonly offered mutual fund share class for [institutional investors](https://www.investopedia.com/terms/i/institutionalinvestor.asp). Y-shares have features and characteristics that are tailored to institutions.

High minimum investments are one of the most distinguishable characteristics of Y-shares and other institutional shares classes. Minimum investments typically begin at $25,000 and can be as high as $5 million. Sales loads are usually not required for Y-shares, which allows institutional investors to buy and sell shares with no added commission charges.

Since Y-shares are not associated with intermediary sales charges, they also usually do not pay any distribution fees or [12b-1 fees](https://www.investopedia.com/terms/1/12b-1fees.asp) from the fund’s expenses. Without 12b-1 fees, the total expense ratios are lower overall than other share classes in the fund, which is another benefit for institutional investors.

## Special Considerations

While Y-shares are typically reserved for institutional investors, they may allow investment from retirement plan investors in some cases. Most [mutual funds](https://www.investopedia.com/terms/m/mutualfund.asp) will have designated retirement share classes with similar benefits to institutional shares.

Funds without retirement share classes may allow pooled fund investments in Y-shares from retirement plans that collectively seek investment in the fund. This can provide a significant benefit to retirement shareholders, who would take part in the savings from the share class’s lower fees.

## Example of Y-Shares

Putnam Investments is one investment manager that offers Y-shares across many of its funds as the primary share class for institutional investors. The [Putnam Global Equity Fund](https://www.putnam.com/individual/mutual-funds/funds/36-global-equity-fund/A) provides one example. The Fund offers [A-shares](https://www.investopedia.com/terms/a/a-shares.asp), B-shares, C-shares, M-shares, R-shares, R6-shares, T-shares, and Y-shares.

The Putnam Global Equity Fund’s Y-share class charges no front-end or back-end sales commissions. The share class also charges no 12b-1 fees, which helps it to have one of the lowest annual expense ratios in the fund. Performance for the Y-shares as of March 31, 2022, was also one of the highest in the Fund for the last five years at 8.92%.

## How Much Does It Cost to Buy Y-Shares?

Many Y-share classes have no fees for purchasing the shares, but charge a management fee. Y-share classes do tend to have a high minimum investment threshold—$25,000 or more, however.

## Why Would My Advisor Change My Shares to Y-Shares?

Advisors may upgrade to Y-shares if there is a cost savings benefit. Mutual funds, meanwhile, may change the share class of an issued fund—called a reclassification—if certain requirements are met.  

  

## What Is the Difference Between F and Y-Shares?

Y-shares are an institutional share class issued by mutual funds, not to be confused with Y stocks. Y-stocks, which are sometimes called Y-shares, are American depositary receipts (ADRs) trading in the U.S. market but represent a foreign stock. F-stocks are foreign stocks trading in the local foreign market.  

> **Article Sources**
>
> 1.  Putnam Investments. "[Putnam Focused International Equity Fund](https://www.putnam.com/literature/pdf/FS006_YA-fff2005a2a5fd0970adac8b3c7655fa7.pdf )."