Mutual Fund

Mutual Funds are a collection of investments under one umbrella which is managed by a professional. These investments can be anything from stocks, commodities to bonds and money market securities. There are many types of Mutual Funds as everyone has a different goal and investment strategy. Mutual Funds can be considered as a form of diversification since different investment vehicles are used in different sectors of the economy. For example, one mutual fund may specialize in technology stocks while another mutual fund may focus on small capitalization stocks. Of course, some Mutual Funds are riskier than others; depending on what percentage of the investments are spread out in which industries. As a service for professional stock selection and management, mutual fund companies charge expense fees, as a percentage of your capital invested. Also, load fees are sometimes imposed when you first invest or when you cash out. These load fees are designed to discourage active trading of mutual funds. With the advent of Exchange Traded Funds (ETF’s), mutual funds have lost a little popularity, but they are still useful for Buy and Hold investors. Learn more about the benefits of Exchange Traded Funds. As of today, there is approximately $25 trillion dollars invested in Mutual Funds around the world.

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