MUTUAL FUND PDF
American investors often turn to mutual funds and exchange- traded funds (ETFs) to save for retirement and other financial goals. Although mutual funds and. The SEC's Office of Investor Education and Advocacy is issuing this Investor Bulletin to explain some of the most common mutual fund fees and expenses. a guide to. Mutual Funds. A mutual fund company is an investment company that pools .. at myavr.info Taxes. In order to avoid the.
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PDF | With few exceptions, mainly in Asia, mutual funds grew explosively in most countries around the world during the s. Equity funds predominated in. What are mutual funds? Simply stated, mutual funds pool money from you and other investors to buy securities — stocks, bonds and other investment vehicles —. Consider investing in mutual funds. ❑Easy way to get started investing. ❑Only takes a small initial amount. ❑You get professional management without spending.
The front-end load is paid by the investor; it is deducted from the amount invested. Back-end load.
Some funds have a back-end load , which is paid by the investor when shares are redeemed. If the back-end load declines the longer the investor holds shares, it is called a contingent deferred sales charges CDSC. Like the front-end load, the back-end load is paid by the investor; it is deducted from the redemption proceeds.
Distribution and services fee.
Some funds charge an annual fee to compensate the distributor of fund shares for providing ongoing services to fund shareholders. The distribution and services fee is paid by the fund and reduces net asset value. Distribution charges generally vary for each share class.
Securities transaction fees incurred by the fund[ edit ] A mutual fund pays expenses related to buying or selling the securities in its portfolio. These expenses may include brokerage commissions. These costs are normally positively correlated with turnover. Shareholder transaction fees[ edit ] Shareholders may be required to pay fees for certain transactions, such as buying or selling shares of the fund.
For example, a fund may charge a flat fee for maintaining an individual retirement account for an investor.
Some funds charge redemption fees when an investor sells fund shares shortly after buying them usually defined as within 30, 60 or 90 days of purchase. Redemption fees are computed as a percentage of the sale amount. Shareholder transaction fees are not part of the expense ratio.
The management fee and fund services charges are ordinarily included in the expense ratio. Front-end and back-end loads, securities transaction fees and shareholder transaction fees are normally excluded. To facilitate comparisons of expenses, regulators generally require that funds use the same formula to compute the expense ratio and publish the results.
Working Papers & Publications
No-load fund[ edit ] In the United States, a fund that calls itself " no-load " cannot charge a front-end load or back-end load under any circumstances and cannot charge a distribution and services fee greater than 0.
Performance assumes reinvestment of distributions and does not account for taxes. For copies of our prospectus or summary prospectus, which contain this and other information, visit our Literature Center or contact your AB representative. The net asset value NAV price is the value of one share of the Portfolio as of the date listed.
Total Returns Peer Comparison Class A annualized returns with sales charge reflect the deduction of the maximum 4. Returns for Class R shares are without the imposition of a sales charge that would apply if shares were purchased outside of a group retirement plan.
Please note the inception dates for the Funds. As of January 31, , Class B shares are no longer available for purchase by new investors. If applicable, please keep in mind that high, double-digit returns are highly unusual and cannot be sustained.
Investors should also be aware that these returns were primarily achieved during favorable market conditions. Fund returns are annualized for periods longer than one year. All rights reserved.
They aim to have money coming into the fund on a regular basis, mostly through interest that the fund earns. High-yield corporate bond funds are generally riskier than funds that hold government and investment-grade bonds.
Equity funds These funds invest in stocks.
Manage existing accounts
These funds aim to grow faster than money market or fixed income funds, so there is usually a higher risk that you could lose money. Balanced funds These funds invest in a mix of equities and fixed income securities.
They try to balance the aim of achieving higher returns against the risk of losing money. Most of these funds follow a formula to split money among the different types of investments.
They tend to have more risk than fixed income funds, but less risk than pure equity funds. Aggressive funds hold more equities and fewer bonds, while conservative funds hold fewer equities relative to bonds.
The value of the mutual fund will go up or down as the index goes up or down.Further information: These funds aim to grow faster than money market or fixed income funds, so there is usually a higher risk that you could lose money. If the period is less than a year, turnover is generally annualized.
These expenses may include brokerage commissions. APT depicts the expected return of a financial asset as a function of various macro-economic or market factors. Some funds have a back-end load , which is paid by the investor when shares are redeemed.
1. Money market funds
The distribution and services fee is paid by the fund and reduces net asset value. Valuing the securities held in a fund's portfolio is often the most difficult part of calculating net asset value. Hybrid funds may be structured as funds of funds , meaning that they invest by buying shares in other mutual funds that invest in securities.
Long-only fund Stable value fund.