The basics of mutual funds

The basics of mutual funds

The Basics Of Mutual Funds:

Definition: Pool of money to invest in securities like stocks and bonds by objective.

Share Classes: Major classes are A, B, C, and Institutional with different loads and expense ratios.

Front End Load: Name for the sales charge or commission paid when purchasing a fund.

Expense Ratio: Total advisory and admin fees as a percentage of assets under management.

Liquidity: Cannot buy and sell intraday like a stock or ETF.

Balanced Fund: Asset allocation funds such as 80% stocks and 20% bonds.

Index Fund: Often low fee funds designed to mirror the performance of a specific index like S&P 500.

Active Fund: Funds that aim to beat their benchmark through proprietary strategies.

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