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.