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There's no universal meaning for any share class - that includes, e.g. class A. (See BJBIX for example, where A shares are retail no load, and I are institutional no load.)
So without telling us what fund or at least what family of funds you're looking at, the best you'll get is a wild guess. Guessing that you're looking at GMO ...
Class VIII is the "highest" class of shares currently authorized (and only for GMO Core Plus Bond Fund, International Bond Fund, Currency Hedged International Bond Fund, and Global Bond Fund). The "higher" the class, the lower the shareholder service fee (all other fees are the same across GMO fund share classes).
Like American Funds classes R-1, R-2, R-3, R-4, etc., the GMO classes are offered to different institutions depending upon the size of the account (the larger the "higher" the class) and possibly some differences in the level of service provided to the institution (reporting, bookkeeping, etc.) The prospectus confirms this: "as the size of the client relationship increases, the cost to service that client decreases as a percentage of the assets in that account. Thus, the Shareholder Service Fee is generally lower for classes that require greater total assets under GMO's management."
Reply to @msf: Thanks. It's ssga s&p 500 index securities lending series fund, I think the ticker is svspx. I can find no info on load or expense ratio for this fund/class. It is offered in our 401k but I am hesitant until I get these details.
Found er to be .36, I think too high for an indexer, plus they "lend" money form this fund..scary never heard of that..still no info on load, I assume none but need to verify.
Reply to @Maurice: Thanks, I saw the .18 for "normal" classes but we can only get class VIII, which has the .36 er..pretty crappy for a 401k offer huh? The ticker is "N/A" in the brochure too..the whole thing smells like sardines..
Good info thanks. I find it boggling that the share class offered for a fund in a 401 has twice the er of the same fund offered to the public. They do have a match, so I'm putting everything in their MM offer for now..which has a .75 er btw. Nuts!
They lend "securities" i.e. stocks from this fund, not cash and fund gets paid for doing this.
The short sellers need to borrow stock from someone to be able to short sell it. The short seller will cover the dividends etc. during this time. When the short seller covers their short, they buy the stock and return it to you (i.e. the fund if fund is doing the lending)
Reply to @igno2: At the beginning of employment it might be OK to keep your cash allocation in 401k and invest more heavily elsewhere. At some point, since assets in 401k plan are locked to the plan unless you leave your job or you are allow in-service rollover, you will have to find something acceptable to invest on your 401k plan.
If you provide a list of funds you have, perhaps we can provide an opinion.
Reply to @Investor: Thanks, they seem a good mix of funds but have odd class designations. It took me 2 days to find out "class viii" basically meant double the fees of a "normal" class. Our previous owner's plan had lots of class I funds which were very low fees (they paid the admin costs). In this new plan the employees are paying them. I don't like it and am now trying to figure out if the match will make up for the double fees. It's probably a wash.
Reply to @igno2: Sometimes change of owner triggers that you can take your old 401k plan and roll it to a rollover ira if the old plan is being terminated as a result of acquisition. If you have that option, you don't have to move your assets to the new owner plan. But as you build assets under new plan, at some point you will be forced to find an investment that is acceptable even if it is not ideal.
Reply to @igno2: I believe there's no symbol because this is a fund designed to be sold only to retirement plans.
For example, you can see a version of this fund offered by the Guardian Advantage annuity, designed for small to midsize company 401K plans. (Small companies often use annuities in their 401Ks, because the fees for the plans then come from the annuity wrapper, which the participants are paying for, rather than from separate fees that the company pays. This also tends to explain the somewhat high index fund ER.)
As I wrote before, I'm guessing you're actually getting a lower ER than a lot of other companies who are paying more for the other classes. But it's really hard to tell and not worth researching.
With respect to lending securities, as Investor wrote, lots of funds do this. The questions are: how the income from the lending is split between the fund and the management company (the more the fund gets, the better); what protections are in place to ensure the securities are returned. Here's a writeup from Vanguard on Securities Lending; page 4 describes Vanguard's approach to lending securities. The fact that Vanguard uses this tool suggests that with the right management, it's not a high risk practice.
Comments
So without telling us what fund or at least what family of funds you're looking at, the best you'll get is a wild guess. Guessing that you're looking at GMO ...
Class VIII is the "highest" class of shares currently authorized (and only for GMO Core Plus Bond Fund, International Bond Fund, Currency Hedged International Bond Fund, and Global Bond Fund). The "higher" the class, the lower the shareholder service fee (all other fees are the same across GMO fund share classes).
Like American Funds classes R-1, R-2, R-3, R-4, etc., the GMO classes are offered to different institutions depending upon the size of the account (the larger the "higher" the class) and possibly some differences in the level of service provided to the institution (reporting, bookkeeping, etc.) The prospectus confirms this: "as the size of the client relationship increases, the cost to service that client decreases as a percentage of the assets in that account. Thus, the Shareholder Service Fee is generally lower for classes that require greater total assets under GMO's management."
Thanks. It's ssga s&p 500 index securities lending series fund, I think the ticker is svspx. I can find no info on load or expense ratio for this fund/class. It is offered in our 401k but I am hesitant until I get these details.
They lend "securities" i.e. stocks from this fund, not cash and fund gets paid for doing this.
The short sellers need to borrow stock from someone to be able to short sell it. The short seller will cover the dividends etc. during this time. When the short seller covers their short, they buy the stock and return it to you (i.e. the fund if fund is doing the lending)
It is not new. A lot of funds do this.
If you provide a list of funds you have, perhaps we can provide an opinion.
I believe there's no symbol because this is a fund designed to be sold only to retirement plans.
For example, you can see a version of this fund offered by the Guardian Advantage annuity, designed for small to midsize company 401K plans. (Small companies often use annuities in their 401Ks, because the fees for the plans then come from the annuity wrapper, which the participants are paying for, rather than from separate fees that the company pays. This also tends to explain the somewhat high index fund ER.)
Here's a Lipper writeup of the fund. https://www.guardianretirement.com/download/FactCard.aspx?ID=594
As I wrote before, I'm guessing you're actually getting a lower ER than a lot of other companies who are paying more for the other classes. But it's really hard to tell and not worth researching.
With respect to lending securities, as Investor wrote, lots of funds do this. The questions are: how the income from the lending is split between the fund and the management company (the more the fund gets, the better); what protections are in place to ensure the securities are returned. Here's a writeup from Vanguard on Securities Lending; page 4 describes Vanguard's approach to lending securities. The fact that Vanguard uses this tool suggests that with the right management, it's not a high risk practice.