Mutual Funds: Most Popular Articles
These articles are the most popular over the last month.
Advantages of a Mutual Fund
There are many reasons to buy a mutual fund. While there are a plethora of investment options (individual stocks, ETFs and close-end funds, to name a few) if you buy a mutual fund, then you a simple, efficient way to invest for retirement, education or other financial goals.
There are many reasons to buy a mutual fund. While there are a plethora of investment options (individual stocks, ETFs and close-end funds, to name a few) if you buy a mutual fund, then you a simple, efficient way to invest for retirement, education or other financial goals.
Disadvantages of Funds
Before you invest, you should do your homework. Will you choose to use mutual funds, closed-end funds, ETFs, and/or individual stocks and bonds? Inevitably, your homework assignment will lead you to articles outlining the disadvantages of mutual funds. But are all of these so-called disadvantages of mutual funds really disadvantages of mutual funds? Let’s take a look at several so-called disadvantages of mutual funds,and how you can avoid them.
Before you invest, you should do your homework. Will you choose to use mutual funds, closed-end funds, ETFs, and/or individual stocks and bonds? Inevitably, your homework assignment will lead you to articles outlining the disadvantages of mutual funds. But are all of these so-called disadvantages of mutual funds really disadvantages of mutual funds? Let’s take a look at several so-called disadvantages of mutual funds,and how you can avoid them.
What Are Mutual Funds?
As a popular investment option, you have probably already heard plenty about mutual funds. Chances are you own mutual funds in your retirement plan or brokerage account. In fact, according to the Investment Company Institute more than 92 million individuals in the U.S. (about 45% of U.S. households) owned mutual funds in 2008. But do you know what mutual funds are and why so many people own them?
As a popular investment option, you have probably already heard plenty about mutual funds. Chances are you own mutual funds in your retirement plan or brokerage account. In fact, according to the Investment Company Institute more than 92 million individuals in the U.S. (about 45% of U.S. households) owned mutual funds in 2008. But do you know what mutual funds are and why so many people own them?
TIPS Mutual Funds
TIPS mutual funds offer many advantages to investors. TIPS are bonds issued by the US Treasury that pay a coupon on the adjusted principal of the bond. The bond is adjusted on a semi-annual basis with the rate of the Consumer Price Index (a measure of inflation).
TIPS mutual funds offer many advantages to investors. TIPS are bonds issued by the US Treasury that pay a coupon on the adjusted principal of the bond. The bond is adjusted on a semi-annual basis with the rate of the Consumer Price Index (a measure of inflation).
Pitfalls of Mutual Funds
Whether you have made a thoughtful decision to invest in mutual funds or you are all but forced to invest in mutual funds (401k, 403b, or other retirement plans), you are bound to read about, hear about, and/or experience the pitfalls of mutual funds. So, let’s take a look at several pitfalls of mutual funds and what we can do to avoid them.
Whether you have made a thoughtful decision to invest in mutual funds or you are all but forced to invest in mutual funds (401k, 403b, or other retirement plans), you are bound to read about, hear about, and/or experience the pitfalls of mutual funds. So, let’s take a look at several pitfalls of mutual funds and what we can do to avoid them.
No-Load Mutual Funds
How many times have we been told that there is no free lunch? The same holds true with no-load mutual funds. No-load mutual funds are free of sales charges (loads), but they do have costs. All share classes of funds -- load or no load -- carry fees that are paid out of the fund’s assets to the fund’s investment advisors (as opposed to paying the advisor/broker who sells the fund).
How many times have we been told that there is no free lunch? The same holds true with no-load mutual funds. No-load mutual funds are free of sales charges (loads), but they do have costs. All share classes of funds -- load or no load -- carry fees that are paid out of the fund’s assets to the fund’s investment advisors (as opposed to paying the advisor/broker who sells the fund).
What Are Closed-End Funds?
Closed-end funds are often confused with, and mistakenly called, mutual funds. A major difference is that closed-end funds behave more like a stock -- the market value is driven by supply and demand for the shares. Perhaps the best way to understand a closed-end fund is to compare it with an open-end mutual fund.
Closed-end funds are often confused with, and mistakenly called, mutual funds. A major difference is that closed-end funds behave more like a stock -- the market value is driven by supply and demand for the shares. Perhaps the best way to understand a closed-end fund is to compare it with an open-end mutual fund.
Mutual Fund Fees
There are various classes of shares of each mutual fund available for purchase (a mutual fund may offer various classes of shares to investors -- the differences are in the fees and expenses of each share class). Several common share classes are: Class A, Class B and Class C. Each share class requires a management and operating fee and many share classes charge a 12b-1 fee.
There are various classes of shares of each mutual fund available for purchase (a mutual fund may offer various classes of shares to investors -- the differences are in the fees and expenses of each share class). Several common share classes are: Class A, Class B and Class C. Each share class requires a management and operating fee and many share classes charge a 12b-1 fee.
How to Buy a Mutual Fund
You have decided to add mutual funds to your well-balanced portfolio. Your next step is to sift through the myriad of choices -- where do you buy mutual funds and how much is it going to cost you?
You have decided to add mutual funds to your well-balanced portfolio. Your next step is to sift through the myriad of choices -- where do you buy mutual funds and how much is it going to cost you?
Primer on the Falling Dollar
Budget deficits, interest rate differentials, and diversification of foreign currency reserves are several of the buzzwords and phrases associated with the volatility of the greenback. Do you think that the future of our beloved dollar is dismal at best? Maybe it’s time to learn how a US investor profits from the falling dollar.
Budget deficits, interest rate differentials, and diversification of foreign currency reserves are several of the buzzwords and phrases associated with the volatility of the greenback. Do you think that the future of our beloved dollar is dismal at best? Maybe it’s time to learn how a US investor profits from the falling dollar.
Depreciating US Dollar
For those mutual fund investors who believe that the US dollar will lose ground against other currencies, how can you obtain an advantage? There is certainly more than one answer to this question. Let’s look at how a mutual fund investor can gain from a depreciating US dollar by investing in international mutual funds.
For those mutual fund investors who believe that the US dollar will lose ground against other currencies, how can you obtain an advantage? There is certainly more than one answer to this question. Let’s look at how a mutual fund investor can gain from a depreciating US dollar by investing in international mutual funds.
Mutual Fund Distributions
Each year, generally in the last couple of months of the year, mutual fund shareholders face the possibility of receiving capital gains distributions from their mutual funds. Don’t be fooled by the capital gains distributions. These are not gains of the good sort.
Each year, generally in the last couple of months of the year, mutual fund shareholders face the possibility of receiving capital gains distributions from their mutual funds. Don’t be fooled by the capital gains distributions. These are not gains of the good sort.
Structure of Funds
Technically, mutual funds are “open-end” funds -- one of four types of investment companies. Closed-end funds, exchange-traded funds and unit investment trusts are the three other types. In order to understand the structure of mutual funds, it is helpful to compare other “40 Act Funds” – industry jargon for investment companies registered under the Investment Company Act of 1940.
Technically, mutual funds are “open-end” funds -- one of four types of investment companies. Closed-end funds, exchange-traded funds and unit investment trusts are the three other types. In order to understand the structure of mutual funds, it is helpful to compare other “40 Act Funds” – industry jargon for investment companies registered under the Investment Company Act of 1940.
Diversification
If the three most important things about investing in real estate are: “location, location and location,” then the three most important things about investing in equities are: “diversification, diversification and diversification.”
If the three most important things about investing in real estate are: “location, location and location,” then the three most important things about investing in equities are: “diversification, diversification and diversification.”
Should You Buy B Shares?
You may hear that mutual fund B shares are a good buy -- generally from transaction-oriented, commission-based advisors/brokers. But more and more mutual fund companies are saying “goodbye” to mutual fund B shares.
You may hear that mutual fund B shares are a good buy -- generally from transaction-oriented, commission-based advisors/brokers. But more and more mutual fund companies are saying “goodbye” to mutual fund B shares.
Top Performing Funds
Each and every year, generally in the first quarter of the year, top performing funds receive accolades from various media outlets. It’s hard to miss these rave reviews of top performing funds, as they are mentioned in nearly every major finance magazine and website. Whether it’s Morningstar’s “Fund Managers of the Year” or Barron’s “Top Fund Families,” the point is always the same. The point is to recognize the top performing funds. But should you purchase these top performing funds?
Each and every year, generally in the first quarter of the year, top performing funds receive accolades from various media outlets. It’s hard to miss these rave reviews of top performing funds, as they are mentioned in nearly every major finance magazine and website. Whether it’s Morningstar’s “Fund Managers of the Year” or Barron’s “Top Fund Families,” the point is always the same. The point is to recognize the top performing funds. But should you purchase these top performing funds?
How to Invest Your 401(k)
There are many issues surrounding how to invest your assets. Typical considerations are how to invest in stocks, how to invest in bonds, how to invest in mutual funds and the “how to invest” list goes on. There are a plethora of “how to invest” considerations. If you’re planning for retirement, how to invest in mutual funds in your 401(k) is usually the top priority.
There are many issues surrounding how to invest your assets. Typical considerations are how to invest in stocks, how to invest in bonds, how to invest in mutual funds and the “how to invest” list goes on. There are a plethora of “how to invest” considerations. If you’re planning for retirement, how to invest in mutual funds in your 401(k) is usually the top priority.
12b-1 Fee
A fee that is charged by some mutual funds, which is used to pay marketing, distribution, and service costs, and is paid to the broker. The Financial Industry Regulation Authority (FINRA) allows funds to charge as much as 1.00% annually as a 12b-1 fee.
A fee that is charged by some mutual funds, which is used to pay marketing, distribution, and service costs, and is paid to the broker. The Financial Industry Regulation Authority (FINRA) allows funds to charge as much as 1.00% annually as a 12b-1 fee.
Money Market Advantages
Money market funds are mutual funds that invest in short-term, high-quality fixed income securities. Money market funds are regulated by the US Securities and Exchange Commission (SEC). The SEC seeks to assure that risks are limited and investors’ interests are protected.
Money market funds are mutual funds that invest in short-term, high-quality fixed income securities. Money market funds are regulated by the US Securities and Exchange Commission (SEC). The SEC seeks to assure that risks are limited and investors’ interests are protected.
Money Management
Many investors don’t have the resources or the time to buy individual securities such as stocks and bonds. In order to profit from investing in individual securities, an investor not only needs resources and time, but a considerable amount of expertise.
Many investors don’t have the resources or the time to buy individual securities such as stocks and bonds. In order to profit from investing in individual securities, an investor not only needs resources and time, but a considerable amount of expertise.
Target-Date Funds
Target-date funds are often thought of as “set it and forget it” funds. For example if you plan to retire in 20 years, you might buy a target-date fund that matches your time-frame -- a target of 20 years. As you approach your retirement date, the fund moves its allocation to more conservative mutual fund investments (holding bonds and cash) and away from riskier mutual funds investments (holding equities).
Target-date funds are often thought of as “set it and forget it” funds. For example if you plan to retire in 20 years, you might buy a target-date fund that matches your time-frame -- a target of 20 years. As you approach your retirement date, the fund moves its allocation to more conservative mutual fund investments (holding bonds and cash) and away from riskier mutual funds investments (holding equities).
Stock or Funds
Answering the question of whether to buy stocks of individual companies or buy stocks via mutual funds, takes an exploration of your objectives and your willingness to take risk. If you understand the risks and rewards of investing in stocks, and you have the ability and willingness to take risk, then the next step is to decide if you would like to buy stocks of individual companies or buy stocks via mutual funds.
Answering the question of whether to buy stocks of individual companies or buy stocks via mutual funds, takes an exploration of your objectives and your willingness to take risk. If you understand the risks and rewards of investing in stocks, and you have the ability and willingness to take risk, then the next step is to decide if you would like to buy stocks of individual companies or buy stocks via mutual funds.
ETFs vs. Mutual Funds
Plenty of articles, white papers and studies have been written about the ETFs versus mutual funds debate. But do any of these pieces actually help investors determine if they should be buying ETFs instead of mutual funds? My question: “Should the issue of ETFs versus mutual funds be passive or active, and then which should you choose?"
Plenty of articles, white papers and studies have been written about the ETFs versus mutual funds debate. But do any of these pieces actually help investors determine if they should be buying ETFs instead of mutual funds? My question: “Should the issue of ETFs versus mutual funds be passive or active, and then which should you choose?"
Variety of Funds
There are many types and styles of mutual funds. There are stock funds, bond funds, money market funds and balanced funds. Mutual funds allow you to invest in the market whether you believe in active portfolio management (actively managed funds) or you prefer to buy a segment of the market with no interference from a manager (passive funds and index funds). The availability of different types of funds allows you to build a diversified portfolio at low cost and without much difficulty.
There are many types and styles of mutual funds. There are stock funds, bond funds, money market funds and balanced funds. Mutual funds allow you to invest in the market whether you believe in active portfolio management (actively managed funds) or you prefer to buy a segment of the market with no interference from a manager (passive funds and index funds). The availability of different types of funds allows you to build a diversified portfolio at low cost and without much difficulty.
Mutual Fund Prospectus
A mutual fund prospectus is to a mutual fund what an owner’s manual is to a car. If you want to learn more about what’s under the hood of your mutual fund, check out the prospectus. The mutual fund prospectus is a valuable tool that contains important information.
A mutual fund prospectus is to a mutual fund what an owner’s manual is to a car. If you want to learn more about what’s under the hood of your mutual fund, check out the prospectus. The mutual fund prospectus is a valuable tool that contains important information.
Mutual Funds - Articles
An index of articles for the Mutual Funds guide site.
An index of articles for the Mutual Funds guide site.
Research Funds
Whether you use an advisor or you do it yourself, you might enjoy a few sites to help you research mutual funds. The first place to research mutual funds is the sites of the broker and/or mutual fund companies. If you feel compelled to research your mutual funds further, you might want to try one of the sites below.
Whether you use an advisor or you do it yourself, you might enjoy a few sites to help you research mutual funds. The first place to research mutual funds is the sites of the broker and/or mutual fund companies. If you feel compelled to research your mutual funds further, you might want to try one of the sites below.
Expense Ratio
The percentage of fees paid to the mutual fund company to manage and operate the fund, including all administrative expenses and 12b-1 fees. The expense ratio excludes sales charges.
The percentage of fees paid to the mutual fund company to manage and operate the fund, including all administrative expenses and 12b-1 fees. The expense ratio excludes sales charges.
Short-Term Gains Distributions
Short-term capital gains distributions are often a misunderstood aspect, and always a dreaded part, of mutual fund investing. Financial advisors, sophisticated investors and novices alike, forget the rules relating to this unpleasant feature of mutual funds we know as short-term capital gains distributions.
Short-term capital gains distributions are often a misunderstood aspect, and always a dreaded part, of mutual fund investing. Financial advisors, sophisticated investors and novices alike, forget the rules relating to this unpleasant feature of mutual funds we know as short-term capital gains distributions.
Regulations of Funds
Regulation of mutual funds, compared to other pooled investment options is extensive. Mutual funds must comply with a strict set of rules that are monitored by the Securities and Exchange Commission.
Regulation of mutual funds, compared to other pooled investment options is extensive. Mutual funds must comply with a strict set of rules that are monitored by the Securities and Exchange Commission.
Load
A mutual fund load is a fee charged when an investor makes a transaction in fund shares. There are also funds that do not charge loads, which are known as “no-load” funds.
A mutual fund load is a fee charged when an investor makes a transaction in fund shares. There are also funds that do not charge loads, which are known as “no-load” funds.
What Is a Sector Fund?
A sector fund is a mutual fund or exchange-traded fund that concentrates its investments in a single sector of the market. If you invest in individual stocks and you’re uncomfortable investing in stocks within a particular sector, then you may benefit from sector funds. You can diversify your portfolio by adding the neglected sector via a sector fund.
A sector fund is a mutual fund or exchange-traded fund that concentrates its investments in a single sector of the market. If you invest in individual stocks and you’re uncomfortable investing in stocks within a particular sector, then you may benefit from sector funds. You can diversify your portfolio by adding the neglected sector via a sector fund.
ETFs
ETF is short for "Exchange-Traded Fund." An ETF holds a basket of securities and trades on a stock exchange.
ETF is short for "Exchange-Traded Fund." An ETF holds a basket of securities and trades on a stock exchange.
UITs
Unit investment trusts (UITs) may be the least understood, and certainly least utilized, of all of the US registered investment companies. What's the problem with UITs? Before answering the question, we need to understand the structure of UITs.
Unit investment trusts (UITs) may be the least understood, and certainly least utilized, of all of the US registered investment companies. What's the problem with UITs? Before answering the question, we need to understand the structure of UITs.
Mutual Funds vs. ETFs
A “Google search” for mutual funds vs. exchange-traded funds will lead you to plenty of sites outlining the pros and cons of mutual funds vs. exchange traded funds. If you’ve tuned into this debate regarding mutual funds vs. exchange-trades funds, then you may be left in a state of confusion when trying to decide between the two investment structures. How do you decide to invest in mutual funds vs. exchange-traded funds?
A “Google search” for mutual funds vs. exchange-traded funds will lead you to plenty of sites outlining the pros and cons of mutual funds vs. exchange traded funds. If you’ve tuned into this debate regarding mutual funds vs. exchange-trades funds, then you may be left in a state of confusion when trying to decide between the two investment structures. How do you decide to invest in mutual funds vs. exchange-traded funds?
Mutual Fund Breakpoint
A discount based on the amount of money invested in a mutual fund that charges a load, or sales charge. The more money an investor commits to a particular mutual fund, or funds within the same fund family, the larger the discount on the sales charge.
A discount based on the amount of money invested in a mutual fund that charges a load, or sales charge. The more money an investor commits to a particular mutual fund, or funds within the same fund family, the larger the discount on the sales charge.
Mutual Fund Advisors Part One
If you have decided that you prefer to spend your time on other things than sifting through thousands of mutual funds, then it’s time to look for a mutual fund advisor. There are many things to consider before choosing a mutual fund advisor. In this segment, we’ll take a look at the fancy letters and titles that you will run across when searching for an advisor.
If you have decided that you prefer to spend your time on other things than sifting through thousands of mutual funds, then it’s time to look for a mutual fund advisor. There are many things to consider before choosing a mutual fund advisor. In this segment, we’ll take a look at the fancy letters and titles that you will run across when searching for an advisor.
Target-Date Mutual Funds
If you are counting on target-date funds as a simple solution to your retirement investments, be careful. Just as with any investment, you need to do some homework first. All target-date funds are not all created equal.
If you are counting on target-date funds as a simple solution to your retirement investments, be careful. Just as with any investment, you need to do some homework first. All target-date funds are not all created equal.
Cost Basis
Cost basis is the purchase price of a mutual fund (or other asset) plus reinvested dividends and reinvested capital gains distributions. The market value less the cost basis is the capital gain or capital loss.
Cost basis is the purchase price of a mutual fund (or other asset) plus reinvested dividends and reinvested capital gains distributions. The market value less the cost basis is the capital gain or capital loss.
NAV
NAV is an acronym for Net Asset Value. The NAV of a fund is the total value of the securities in the fund minus liabilities, divided by shares outstanding.
NAV is an acronym for Net Asset Value. The NAV of a fund is the total value of the securities in the fund minus liabilities, divided by shares outstanding.
Finding a Fund Advisor
Before choosing your mutual fund advisor, it’s important that you understand the various advisors’ philosophies. These philosophies include investment viewpoints, client service attitude and financial planning values.
Before choosing your mutual fund advisor, it’s important that you understand the various advisors’ philosophies. These philosophies include investment viewpoints, client service attitude and financial planning values.
About - Mutual Funds Buyer's Guide
Find Guide reviews, top picks, and advice you can use before you buy.
Find Guide reviews, top picks, and advice you can use before you buy.