Mutual funds offer an investment solution to investors who do not have the

ESSENTIALS • Mutual funds pool the money of many investors to purchase a range of securities to meet specified objectives, such as growth, income or both. • Mutual funds can offer cost-effective diversification. • Each mutual fund has a different investment objective. Some funds invest in a particular product, such as stocks or bonds. Some focus on a particular industry or region. Others seek to replicate a market index. • All mutual funds have fees and expenses. Use FINRA’s • A mutual fund may have different share classes with different costs. Your investment professional might receive higher (or lower) commissions or payments for the sale of one share class relative to another. • It’s important to read a mutual fund’s prospectus to learn about its objectives, investments, strategies and costs. Mutual funds are a popular way to invest in securities. Because mutual funds can offer built-in A mutual fund is an investment company that pools money from many investors and invests it based on specific investment goals. The mutual fund raises money by selling its own shares to investors. The money is used to purchase a portfolio of stocks, bonds, short-term money-market instruments, other securities or assets, or some combination of these investments. Each share represents an ownership slice of the fund and gives the investor a proportional right, based on the number of shares they own, to income and capital gains that the fund generates from its investments. The particular inve...

A mutual fund is a professionally managed portfolio of stocks, bonds and/or other income vehicles devoted to a specific investment strategy or asset class. When investors buy shares in the fund, the mutual fund company pools that money to make investments on their behalf. A share represents a portion of the fund's holdings. What are the potential benefits of investing in mutual funds? What factors should I consider before investing in mutual funds? While reviewing your mutual fund options, be sure to evaluate your: • Goals What do you want from your mutual fund investment? Are you saving for your retirement, your children's college or investing money for future generations? The answers to these questions can help you narrow down which funds would work best. • Time horizon Mutual funds are typically better suited for long term investors. If you think you'll need your money in the near future, say within three to five years, then a mutual fund may not be the best option. This is because the return in that amount of time – once removing the cost of fees – may not be enough to make the investment worth it. • Risk tolerance Determine how comfortable you are with risk and invest accordingly. Understanding your risk tolerance can help you select funds with strategies and asset allocations that fit this profile. What are some risks associated with mutual funds? There are a couple of potential risks associated with mutual funds: • Potential for loss of principal Portfolio managers ...

What is a mutual fund? Mutual funds offer investors the opportunity to group their money together and buy stocks, bonds and other investments "mutually” to invest in a common objective, such as generate current income or seek long-term growth. As a mutual fund investor, you don’t directly own the stock in the companies the fund purchases but share equally in the profits or losses of the fund’s total holdings – another reason they’re called “mutual funds.” Other key characteristics of mutual funds: • They’re run by professional money managers who decide which securities to buy (stocks, bonds, etc.) and when to sell them, with the goal of giving you the best return on your investment. • They typically have low minimum investments and are traded only once per day at the closing net asset value. • You get exposure to all the investments in the fund, and any income or losses they generate. • They offer a wide variety of investment strategies and styles. How do mutual funds work? All mutual funds fall into two categories – actively or passively managed funds – and these categories help determine the fund’s fees and performance. Actively managed funds – These funds strive to beat the market. They’re overseen by portfolio managers who actively select the securities they think will outperform the market. Most mutual funds are actively managed. Pros Cons Opportunity to overperform: As active funds seek to beat the index, they offer you the potential to earn higher returns than the a...