What defines a multi-class fund?

A multi-class fund is defined specifically by its structure, which entails having more than one class of units within the fund. This means that investors can choose from different unit classes, each of which may offer distinct features, charges, or fee structures. This flexibility allows fund managers to cater to a variety of investor needs and preferences. For example, one class might be designed for institutional investors with lower fees due to larger investment amounts, while another class might feature higher fees tailored for retail investors with smaller investments.

While a fund with multiple investment strategies or one that only invests in equities might seem to fit broader definitions of diversity, they do not capture the fundamental aspect of what constitutes a multi-class fund. Similarly, the option involving loans to clients does not relate to the unit classification of the fund. Thus, the defining element of a multi-class fund lies squarely in its structural characteristic of offering multiple classes of units.