Mutual funds

Mutual funds give small or individual investors access to professionally managed portfolios of equities, bonds, and other securities. Each shareholder, therefore, participates proportionally in the gains or losses of the fund. Mutual funds invest in a vast number of securities, and performance is usually tracked as the change in the total • A mutual fund is a type of investment vehicle consisting of a portfolio of stocks, bonds, or other securities. • Mutual funds give small or individual investors access to diversified, professionally managed portfolios. • Mutual funds are divided into several kinds of categories, representing the kinds of securities they invest in, their investment objectives, and the type of returns they seek. • Mutual funds charge annual fees, expense ratios, or commissions, which may affect their overall returns. • Employer-sponsored retirement plans commonly invest in mutual funds. How Are Mutual Funds Priced? The value of the mutual fund depends on the performance of the securities in which it invests. When buying a unit or share of a mutual fund, an investor is buying the performance of its portfolio or, more precisely, a part of the portfolio's value. Investing in a share of a mutual fund is different from investing in shares of stock. Unlike stock, mutual fund shares do not give their holders any The average mutual fund holds different securities, which means mutual fund shareholders gain diversification. Consider an investor who buys only Google...

Class-C mutual fund shares charge a level sales load set as a fixed percentage assessed each year. This is different from front-load shares that charge investors at purchase or back-end loads that charge at time of sale. Class-C shares work best for investors planning to hold them for three years or less.

A mutual fund is a pooled collection of assets that invests in stocks, bonds, and other securities. When you buy a mutual fund, you get a more diversified holding than you would with an individual security, and you can enjoy the convenience of automatic investing if you meet the minimum investment requirements. How do mutual funds—and the people who invest in them—make money? Stock and bond funds make money in 2 ways: • Income. When an underlying security that the fund invests in pays • Capital gains. When a fund sells an underlying security at a price higher than what was initially paid, the fund makes a profit. When the fund's total profits exceed its total losses, it realizes a "net capital gain" and is required to distribute those gains to its shareholders. Then, as an investor, how do you make money? • When you receive an income or capital gains distribution from the fund. • When you sell your fund shares at a price higher than what you originally paid for them. Interest The amount or percentage rate that lenders charge (and borrowers pay) when money is borrowed. For example, when you buy a bond, the bond's issuer agrees to not only return your money to you at a specific time but also pay you a set percentage above what you originally invested to compensate you for "lending" the money. What's the difference between an actively managed fund and an index fund? Index mutual funds and ETFs (exchange-traded funds) aim to match the performance of a particular market benchma...