A-Shares

Posted in Finance, Accounting and Economics Terms, Total Reads: 1081
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Definition: A-Shares

In a multi class classification of common or preferred stock or of mutual funds., A-share refers to shares with enhanced voting rights or other benefits or mutual funds characterized by loaded fee structure.


A-Share (Mainland China)

Shares of Chinese companies traded on Shanghai Stock Exchange and the Shenzhen Stock Exchange quoted in Chinese Renminbi (RMB). Available to purchase only to the resident of the People's Republic of China. International investors can trade A Shares only through Qualified Foreign Institutional Investor (QFII) system, a tightly-regulated structure. While a B-Share is quoted in foreign exchanges and open to investment from both foreign or domestic residents.

The variation in A share and B share of a company may differ based on the demand in that market that he same share can be purchased at lower rate on a different exchange.

This classification helps a company to limit voting rights to a small percent of owners. It also help the company to list itself on various stock exchanges.


A-share (Mutual Fund)

Different share classes are used to provide different fee structure to attract investor. The fees can be loaded upfront or on accrual basis. This can be a method to compensate for the sale's person commission. A class share has lower management expense compared to other classes within the same family.

 

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