What is a Mutual Fund
THINKING ABOUT INVESTING IN MUTUAL FUNDS?
A mutual fund is a pool of money handled by a money manager on behalf of investors. The manager uses the pool of money to purchase investments which follow the fund’s investment objectives. Investors purchase units that represent their share of the pool of money, and lose or gain money depending on the performance of the underlying investments.
If you are looking at a mutual fund investment, here are some things to consider:
Risk
While mutual funds offer the advantage of diversification, the amount of risk you take on depends on the funds you choose. Make sure the funds that you choose fit your risk profile.
Time horizon
If you need short-term access to your money and choose to redeem early, you may pay high fees or have to sell the fund when performance is poor. If you have a long time horizon, you may be able to take on more risk with your money.
Fees
Sales fees (also known as loads) affect your overall return and can vary widely between funds. Management fees such as the Management Expense Ratio get paid whether the fund performance is good or bad. It pays to shop around.
For more information on mutual funds contact the (Agency) at (toll-free number). For more unbiased investor education information check out the (Agency’s) website at (URL).
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