If you pay attention to mutual funds you’ve probably noticed how many have labels that seem to be straight out of Sesame Street. There are A-series funds, and R, and I and M. Others are brought to you by the letter B, D or F. I’ve scratched my head a few times at these classifications. Is A better than B? And if F stands for fees, do you pay higher fees or lower fees on an F-series fund?

Don’t feel bad if you find this alphabet soup of funds as confusing as I do. Even the experts are sometimes baffled. “I’m honestly taken aback sometimes by the different varieties of funds,” says Dan Hallett, president of Dan Hallett and Associates, an investment research firm in Windsor, Ont. “If you look at TD Mutual Funds alone, they have H and S and T and D and F, and a couple more.”

The problem isn’t that mutual fund companies have used up nearly every letter in the alphabet. It’s that they can’t agree on what the letters mean in the first place. RBC’s D-series funds, for instance, are low-fee funds for do-it-yourself investors. Over at Fidelity Investments, however, D-series are sold through advisers. Another example: several banks use the letter I for funds sold to institutional investors. But National Bank calls its institutional class funds M-series. No wonder most of us find it nearly impossible to compare funds.

Fortunately, Goshka Folda, senior managing director at Investor Economics, a Toronto research company, has compared all these funds and puts them into a handful of easy-to-understand categories:

The original series

These are the one-size-fits all mutual funds that most of us own. Banks tend to refer to them as A or B series funds, but not always. The easiest way to spot them is by their high annual management fees, upwards of 2% of your investments per year.These funds may also charge front-end loads, back-end loads or deferred service charges.

Adviser series

These funds are sold through full-service advisers. The catch is there are trailer fees embedded in the management expense ratio, which can add to how much you can expect to pay a year in fees. Some investment companies use the letters C or B to denote Adviser funds. Others simply call them Adviser series.

I and O-series

These letters usually refers to funds designed for institutional or high net worth investors. The fees are low, but unless you have a million dollars to invest, don’t even bother trying to join the club.

F-series

F-series funds are essentially regular mutual funds, except what you pay your adviser is separated from what you pay the fund company. Since your adviser’s fee isn’t included, management fees on F-series funds usually appear to be very low and you don’t have to worry that your adviser is recommending funds based on how much the fund company is paying him. Problem is, you still have to pay your adviser a separate fee. Once you add that in, you may not be saving any money at all.

T-series

These funds put the emphasis on avoiding T — which stands for tax. T-series funds pay out a monthly cash distribution. The advantage is the payout isn’t taxable at the time it’s received so T-series funds are perceived as offering an extra bit of tax efficiency. The T-series option can be mixed with other features. So a TF-series fund combines the fee structure of F-series funds with the cash payout of T-series funds.

Whew. Confusing, isn’t it? Especially since what you really want to know is which letter means the best deal for you.

The answer is that letters don’t mean much at all. The real question is how much, in total, you wind up paying in fees and other charges. If you pay too much, it’s hard to get a decent return.

Your goal should be to find the best low-cost investment you can. One excellent option is TD’s E-series funds, which can only be purchased online. Also intriguing are RBC Direct Investing’s D-series funds. They’re designed for people who have at least $10,000 to invest and would rather do their own research than pay for advice. While typical management expense ratios on Canadian equity funds are 2.54%, RBC’s D-series fees charge only 1.15%.

You should also consider funds from Mawer or Leith Wheeler. These firms aren’t so well known as some of their bigger competitors, but they offer outstanding value. Mawer’s Canadian Equity Fund, for instance, has an MER of only 1.2% and the minimum investment is only $5,000.

Sticking with these low-cost options means more of your returns wind up in your own wallet, rather than in your fund company’s. They also mean you don’t have to memorize all the ABCs of the mutual fund alphabet. And that’s good, because you’ll soon be so busy counting the money you save by avoiding fees that your favorite subject will be math.