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Selecting the Best Mutual Fund @ BillDoll.Com
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Selecting the Best Mutual Fund
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Mutual funds offer an optimal investment vehicle where you take risks but (hopefully) sensibly. If the mutual fund you are investing is a high-quality fund, then what you are actually getting is a high-quality research infrastructure and analytical brains rto work on your money.
Mutual funds are hence a favorite among many investors around the world, especially for equity investments.
However, with over 9,000 mutual funds available in the U.S. alone, the odds of making a serious financial mistake are enormous. The world of mutual funds is a volatile world where mistakes can be quite expensive. Picking up the right funds is hence of terrible importance.
How does one select the best mutual fund? This is the question that this section answers, with useful resources and references from around the web.
This page like all the other pages at BillDoll.com, The Billion Dollar Questions Site - is a work-in-progress and stuff will get added regularly.
Some Key Tips
Evaluating a Mutual Fund
Define your objective: The most important step in selecting a mutual fund may very well be deciding what you want it for. Unfortunately, many investors skip this step, and choose a mutual fund without a clear idea of what they want from it. That is like paying for a product without knowing what that product is! Investment objectives can be specific (eg. down payment on a home), or general (become more wealthy) Whatever the objectives, these should be well defined articulated up front.
Define your time period: How long do you wish to wait have to reach my objective? Naturally, all of us would like to reach our financial objectives at the earliest, but please be realistic even if ambitious while setting this time period. That is, setting a time period that is difficult is all right, but setting a time period that is impossible, is not.
As a general rule, investors with near-term needs should probably concentrate on money market funds or short-term bond funds. Those with an intermediate-term outlook may want to choose either income funds or funds that seek a combination of income and growth. And investors with long-term horizons should consider growth-oriented funds, since these invest primarily in stocks, an asset class which, when compared to income investments, has achieved the best historical returns over time.
Define your risk tolerance: How much risk can you tolerate? If you have a low tolerance for risk, you should stick to the most conservative choices, such as money market funds. If you have a moderate tolerance for risk, you should seek to blend conservative and aggressive funds or look for one fund with a blended approach, such as a growth and income fund or a balanced fund. If you are comfortable with a fair amount of risk, you can choose from among the more aggressive mutual funds like aggressive growth funds and sector funds.
Define how mutual funds will complement your other investments: Make an assessment of your total financial picture. The goal is to avoid duplication or over-concentration of assets. Do you have savings accounts, retirement plans or individual stocks and bonds? Insurance or income-producing property? As you can easily see, mutual funds may have a role to play in your overall investment portfolio, but they should not be viewed as stand-alone assets.
There is the commonly held belief by many investors that certain funds do better or worse than others because they briefly outperform or under-perform the averages. This is not correct, since many of these successes could be temporary. On the other hand, if one were to compare long-term returns / performance, it is true that most funds do become average performers. Nevertheless, look for the some of the following indications when choosing a fund:
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Content derived from Wikipedia article on Mutual Fund
A mutual fund is a form of collective investment that pools money from many investors and invests the money in stocks, bonds, short-term money market instruments, and/or other securities. In a mutual fund, the fund manager trades the fund's underlying securities, realizing capital gains or loss, and collects the dividend or interest income. The investment proceeds are then passed along to the individual investors. The value of a share of the mutual fund, known as the net asset value (NAV), is calculated daily based on the total value of the fund divided by the number of shares purchased by investors.
Legally known as an "open-end company", a mutual fund is one of three basic types of investment companies available in the United States.[2] Outside of the U.S. (with the exception of Canada which follows the US model), mutual fund is a generic term for various types of collective investment. In the UK and western Europe (including offshore jurisdictions), other forms of collective investment are prevalent including unit trusts, Open-Ended Investment Companies (OEICs), SICAVs and unitized insurance funds.
In Australia the term "mutual fund" is not used, the name "managed fund" is used instead. However this term is somewhat generic as the definition of a managed fund in Australia is any vehicle where investors' money is managed by a third party (NB: usually an investment professional or organisation). Most managed funds are open-ended, however this need not be the case. Additionally the Australian government introduced a compulsory superannuation/pension scheme which although strictly speaking is a managed fund, is rarely identified by this term and called a "superannuation fund" instead due to its special tax concessions and restrictions on when the money can be accessed.
History
Massachusetts Investors Trust was founded on March 21, 1924, and, after one year, had 200 shareholders and $392,000 in assets. The entire industry, which included a few closed-end funds, represented less than $10 million in 1924.
The stock market crash of 1929 slowed the growth of mutual funds. In response to the stock market crash, Congress passed the Securities Act of 1933 and the Securities Exchange Act of 1934. These laws require that a fund be registered with the SEC and provide prospective investors with a prospectus. The SEC (U.S. Securities and Exchange Commission) helped create the Investment Company Act of 1940 that provides the guidelines with which all funds today must comply.
In 1951, the number of funds surpassed 100, and the number of shareholders exceeded 1 million. Only in 1954 did the stock market finally rise above its 1929 peak, and, by the end of the 1950s, there were 155 mutual funds with $15.8 billion in assets. In 1967, funds hit their best year, one quarter earning at least 50% with an average return of 67%, but it was done by cheating using borrowed money, risky options, and pumping up returns with privately traded "letter stock". By the end of the 1960s, there were 269 funds with a total of $48.3 billion.
With renewed confidence in the stock market, mutual funds began to blossom. By the end of the 1960s, there were approximately 270 funds with $48 billion in assets. The first retail index fund, the First Index Investment Trust, was released in 1976 and headed by John Bogle, who conceptualized many of the key tenets of the industry in his 1951 senior thesis at Princeton University. It is now called the Vanguard 500 Index fund and is one of the largest mutual funds ever with in excess of $100 billion in assets.
One of the largest contributors of mutual fund growth was Individual Retirement Account (IRA) provisions made in 1975, allowing individuals (including those already in corporate pension plans) to contribute $2,000 a year. Mutual funds are now popular in employer-sponsored defined contribution retirement plans (401k), IRAs and Roth IRAs.
As of April 2006, there are 8,606 mutual funds that belong to the Investment Company Institute (ICI), the national association of Investment Companies in the United States, with combined assets of $9.207 trillion USD.
Usage
Mutual funds can invest in many different kinds of securities. The most common are cash, stock, and bonds, but there are hundreds of sub-categories. Stock funds, for instance, can invest primarily in the shares of a particular industry, such as technology or utilities. These are known as sector funds. Bond funds can vary according to risk (high yield or junk bonds, investment-grade corporate bonds), type of issuers (government agencies, corporations, or municipalities), or maturity of the bonds (short or long term). Both stock and bond funds can invest in primarily US securities (domestic funds), both US and foreign securities (global funds), or primarily foreign securities (international funds).
Most mutual funds' investment portfolios are continually adjusted under the supervision of a professional manager, who forecasts the future performance of investments appropriate for the fund and chooses the ones which he or she believes will most closely match the fund's stated investment objective. A mutual fund is administered through a parent management company, which may hire or fire fund managers.
Mutual funds are subject to a special set of regulatory, accounting, and tax rules. Unlike most other types of business entities, they are not taxed on their income as long as they distribute substantially all of it to their shareholders. Also, the type of income they earn is often unchanged as it passes through to the shareholders. Mutual fund distributions of tax-free municipal bond income are also tax-free to the shareholder. Taxable distributions can either be ordinary income or capital gains, depending on how the fund earned it.
Net asset value
The net asset value, or NAV, is a fund's value of its holdings, usually expressed as a per-share amount. For most funds, the NAV is determined daily, after the close of trading on some specified financial exchange, but some funds update their NAV multiple times during the trading day. Open-end funds sell and redeem their shares at the NAV, and so only process orders after the NAV is determined. Closed-end funds may trade at a higher or lower price than their NAV; this is known as a premium or discount, respectively. If a fund is divided into multiple classes of shares, each class will typically have its own NAV, reflecting differences in fees and expenses paid by the different classes.
Some mutual funds own securities which are not regularly traded on any formal exchange. These may be shares in very small or bankrupt companies; they may be derivatives; or they may be private investments in unregistered financial instruments (such as stock in a non-public company). In the absence of a public market for these securities, it is the responsibility of the fund manager to form an estimate of their value when computing the NAV. How much of a fund's assets may be invested in such securities is stated in the fund's prospectus.
Turnover
Turnover is a measure of the fund's securities transactions, usually in a year, and usually expressed as a percentage of net asset value.
This value is usually calculated as the value of all transactions (buying, selling) divided by 2 divided by the fund's total holdings; i.e., the fund counts one security sold and another one bought as one "turnover". Thus turnover measures replacing holdings.
In Canada, under NI 81-106 (required disclosure for investment funds) turnover ratio is calculated based on the lesser of purchases or sales divided by the average size of the portfolio (including cash).
Turnover generally has tax consequences for a fund, which are passed through to investors. In particular, when selling an investment from its portfolio, a fund may realize a capital gain, which will ultimately be distributed to investors as taxable income. The very process of buying and selling securities also has its own costs, such as brokerage commissions, which are borne by the fund's shareholders.
Expenses and TER's
Mutual funds bear expenses similar to other companies. The fee structure of a mutual fund can be divided into two to three main components: management fee, nonmanagement expense, and 12b-1/Non-12b-1 fees. All expenses are expressed as a percentage of the average daily net assets of the fund.
Management Fees
The management fee for the fund is usually synonymous with the contractual advisor fee charged for the investment management. However, as many fund companies include administrative fees in the advisory fee component, when attempting to compare the total management expenses of different funds, it is helpful to define management fee as equal to contractual advisor fee + contractual administrator fee. This "levels the playing field" when comparing management fee components.
Contractual advisory fees may be structured as "flat-rate" fees. A single fee charged to the fund, regardless of the asset size of the fund. However, many funds have contractual fees which include breakpoints, such that as the assets of the fund increase, the advisory fee paid decreases. Another way that the advisory fees remain competitive are by fees paid based off of the total assets of a group or a complex of funds rather than a single fund.
Non-management Expenses
Other than the management fee of the fund, there are certain nonmanagement expenses which most funds must pay. Some of the more significant (size-wise) nonmanagement expenses are: Transfer Agent expenses (this is usually the person you get on the other end of the phone line when you want to purchase/sell shares of a fund), Custodian expense (the fund's assets are kept in custody by a bank which charges a custody fee), Legal/Audit expense, Fund Accounting Expense, Registration expense (registering shares with the SEC), Board of Directors/Trustees expense (the non-interested members of the board which oversee the fund are usually paid a fee for their time spent at board meetings), Printing and Postage expense (expense incurred when printing and sending shareholder reports).
12b-1/Non-12b-1 Service Fees
12b-1 service fees/shareholder servicing fees are contractual fees which a fund may charge to cover the marketing expenses of the fund. Non-12b-1 service fees are marketing/shareholder servicing fee which do not fall under SEC rule 12b-1. While funds do not have to charge the full contractual 12b-1 fee, they often do. When investing in a front-end load or no-load fund, the 12b-1 fees for the fund are usually .250% or 25 basis points. The 12b-1 fees for back-end and level load share classes are usually between 50 and 75 basis points but may charge up to 100 basis points. While funds are often marketed as "no-load" this does not mean they do not charge this distribution expense through a different path. It is expected that a fund listed on an online brokerage site will be paying for the "shelf-space" in a different manner if not directly through a 12b-1 fee.
Fees and Expenses Borne by the Investor (not the Fund)
Fees and expenses born by the investor vary based on the arrangement made with their broker. Sales loads (or Contingent Deferred Sales Loads, CDSL) are not included in the fund's Total Expense Ratio (TER) because they do not pass through the statement of operations for the fund. Additionally, funds may charge early redemption fees to discourage investors from swapping money into and out of the fund quickly, which may force the fund to make bad trades to get the necessary liquidity. For example, Fidelity Diversified International Fund (FDIVX) charges a 1 percent fee on money removed from the fund in less than 30 days.
Brokerage Commissions
One additional expense which does not pass through the statement of operations and cannot be controlled by the investor is brokerage commissions. Brokerage commissions are incorporated into the price of the fund and are reported usually 3 months after the fund's Annual Report in the Statement of Additional Information for the fund. Brokerage commissions are directly related to portfolio turnover (portfolio turnover refers to the number of times the fund's assets are bought and sold over the course of a year). Usually the higher the portfolio turnover, the higher the brokerage commissions. The advisors of mutual fund companies are required to achieve "best execution" through brokerage arrangements so that the commissions charge will not be excessive to the fund.
Types of mutual funds
Open-end fund
The term Mutual fund is the common name for an open-end investment company. Being open-ended means that at the end of every day, the investment management company sponsoring the fund issues new shares to investors and buys back shares from investors wishing to leave the fund.
Mutual Funds may be legally structured as corporations or business trusts but in either instance are classed as open-end investment companies by the SEC.
Other funds have a limited number of shares; these are either closed-end fund or unit investment trusts neither of which are mutual funds.
Exchange-traded funds
A relatively new innovation, the exchange traded fund (ETF), is often formulated as an open-end investment company. The way ETFs work combines characteristics of both mutual funds and closed-end funds. An ETF usually tracks a stock index (see Index funds). Shares are only created or redeemed by institutional investors in large blocks (typically 50,000 shares). Investors typically purchase shares in small quantities through brokers at a small premium or discount to the net asset value through which the institutional investor makes their profit. Because the institutional investors handle the majority of trades, ETFs are more efficient than traditional mutual funds and therefore tend to have lower expenses. ETFs are traded throughout the day on a stock exchange, just like closed-end funds.
Equity funds
Equity funds, which mainly consist of stock investments, are the most common type of mutual fund. Equity funds hold 50 percent of total funds invested in mutual funds in the United States. Oftentimes equity funds focus investments on particular strategies and certain types of companies.
Capitalization
Some mutual funds focus investments on companies of particular size ranges, with size measured by their market capitalization. The size ranges include micro-cap , small-cap, mid-cap, and large-cap. Fund managers and other investment professionals have varying definitions of these market cap ranges. The following ranges are used by Russell Indexes [6] include:
Russell Microcap Index - micro-cap ($54.8 - 539.5 million) Russell 2000 Index - small-cap ($182.6 million - 1.8 billion) Russell Midcap Index - mid-cap ($1.8 - 13.7 billion) Russell 1000 Index - large-cap ($1.8 - 386.9 billion)
Growth vs. value
Another division is between growth funds, which invest in stocks of companies that have the potential for large capital gains, versus value funds, which concentrate on stocks that are undervalued. Growth stocks typically have a potential for larger return, however such investments also bear larger risks. Growth funds tend not to pay regular dividends. Sector funds focus on specific industry sectors, such as biotechnology or energy. Income funds tend to be more conservative investments, with a focus on stocks that pay dividends. A balanced fund may use a combination of strategies, typically including some investment in bonds, to stay more conservative when it comes to risk, yet aim for some growth.
Index funds versus active management
An index fund maintains investments in companies that are part of major stock indices, such as the S&P 500, while an actively-managed fund attempts to outperform a relevant index through superior stock-picking techniques. The assets of an index fund are managed to closely approximate the performance of a particular published index. Since the composition of an index changes infrequently, an index fund manager makes fewer trades, on average, than does an active fund manager. For this reason, index funds generally have lower trading expenses than actively-managed funds, and typically incur fewer short-term capital gains which must be passed on to shareholders. Additionally, index funds do not incur expenses to pay for selection of individual stocks (proprietary selection techniques, research, etc.) and deciding when to buy, hold or sell individual holdings. Instead, a fairly simple computer model can identify whatever changes are needed to bring the fund back into agreement with its target index.
The performance of an actively-managed fund largely depends on the investment decisions of its manager. Statistically, for every investor who outperforms the market, there is one who underperforms. Among those who outperform their index before expenses, though, many end up underperforming after expenses. Before expenses, a well-run index fund should be average. By minimizing the impact of expenses, index funds should be able to perform better than average.
Certain empirical evidence seems to illustrate that mutual funds do not beat the market and actively managed mutual funds under-perform other broad-based portfolios with similar characteristics. Finds that nearly 1,500 U.S.A. mutual funds under-performed the market in approximately half the years between 1962 and 1992. Moreover, funds that performed well in the past are not able to beat the market again in the future (shown by Jensen, 1968; Grimblatt and Titman, 1989. However, as quantitative finance is in its early stages of development more accurate studies are required to reach a decisive conclusion.
Bond funds
Bond funds account for 18% of mutual fund assets. Types of bond funds include term funds, which have a fixed set of time (short, medium, long-term) before they mature. Municipal bond funds generally have lower returns, but have tax advantages and lower risk. High-yield bond funds invest in corporate bonds, including high-yield or junk-bonds. With the potential for high yield, these bonds also come with greater risk.
Money market funds
Money market funds hold 26% of mutual fund assets in the United States. Money market funds entail the least risk, as well as lower rates of return. Unlike certificate of deposits (CDs), assets in money market funds are liquid and redeemable at any time. The interest rate quoted by money market funds is known as the 7 Day SEC Yield.
Funds of Funds
Funds of Funds (FoF) are structured as mutual funds which invest in other underlying mutual funds. The funds at the underlying level are typically funds which an investor can enter individually. A FoFs will typically charge a management fee which is smaller than that of a fund because it is considered a fee charged for asset allocation services. The fees charged at the underlying fund level do not pass through the statement of operations, but are usually disclosed in the fund's annual report/prospectus/or statement of additional information. The fund should be evaluated based on the combination of the fund-level expenses and underlying fund expenses, as these both reduce the return to the investor.
Most FoFs invest in affiliated funds (those mutual funds managed by the same advisor), but some will invest in funds from other fund companies (unaffiliated). The cost associated with entering an unaffiliated FoFs is most often higher than an affiliated FoFs due to the investment management research involved with investing in another fund company. More recently, FoFs can be classified into those that are actively managed (the investment advisor attempts to reallocated frequently among the underlying funds in order to adjust to changing market conditions) and those that are passively managed (the investment advisor attempts to allocate assets based on an allocation model which is rebalanced on a regular basis).
The design of FoFs are structured in order to provide investors with a ready-mix of mutual funds for those that are unable to or do not want to determine their own asset allocation model. Fund companies such as TIAA-CREF, Vanguard, and Fidelity have also entered this market to provide investors with these options and take the "guess work" out of selecting funds. The allocation mixes usually vary by the time the investor would like to retire: 2020, 2030, 2050, etc. As the retirement date is further away, the asset mix is usually more aggressive.
Hedge funds
Hedge funds in the United States are pooled investment funds with loose SEC regulation, and should not be confused with mutual funds. Certain hedge funds are required to register with SEC as investment advisers under the Investment Advisers Act. [11] The Act does not require an adviser to follow or avoid any particular investment strategies, nor does it require or prohibit specific investments. Hedge funds typically charge a fee greater than 1%, plus a "performance fee" of 20% of a hedge fund's profits. There may be a "lock-up" period, during which an investor cannot cash in shares.
Mutual funds vs. other investments
Mutual funds offer several advantages over stock investments, including diversification and professional management. A mutual fund may hold investments in hundreds or thousands of stocks, thus reducing risk of any particular stock. Also, the transaction costs associated with buying individual stocks are also spread around among all the mutual fund shareholders. As well, a mutual fund benefits from professional fund managers who can apply their expertise and dedicate time to research investment options. Mutual funds, however, are not immune to risks. Mutual funds share the same risks associated with the types of investments the fund makes. If the fund mainly invests in stocks, the mutual fund is usually subject to the same ups and downs and risks as the stock market.
Selecting a mutual fund
Picking a mutual fund from among the thousands offered is not easy. Following are some common pitfalls.
The compounding effect is your best friend. A modest return over a long period of time equals a large return overall.
Share class
Many mutual funds offer more than one class of shares. For example, you may have seen a fund that offers "Class A" and "Class B" shares. Each class will invest in the same "pool" (or investment portfolio) of securities and will have the same investment objectives and policies. But each class will have different shareholder services and/or distribution arrangements with different fees and expenses. These differences are supposed to reflect different costs involved in servicing investors in various classes; for example, one class may be sold through brokers with a front-end load, and another class may be sold direct to the public with no load but a "12b-1 fee" included in the class's expenses (sometimes referred to as "Class C" shares). Still a third class might have a minimum investment of $10,000,000 and only be open to financial institutions (a so-called "institutional" class). In some cases, by aggregating regular investments by many individuals, a retirement plan (such as a 401(k) plan) may qualify to purchase "institutional" shares (and gain the benefit of their typically-lower expense ratios) even though no members of the plan would qualify individually. As a result, each class will likely have different performance results.
A multi-class structure offers investors the ability to select a fee and expense structure that is most appropriate for their investment goals (including the time that they expect to remain invested in the fund).
Load and expenses
A front-end load or sales charge is a commission paid to a broker by a mutual fund when shares are purchased, taken as a percentage of funds invested. The value of the investment is reduced by the amount of the load. Some funds have a deferred sales charge or back-end load. In this type of a fund an investor pays no sales charge when purchasing shares, but will pay a commission out of the proceeds when shares are redeemed depending on how long they are held. Another derivative structure is a level-load fund, in which no sales charge is paid when buying the fund, but a back-end load may be charged if the shares purchased are sold within a year.
Load funds are sold through financial intermediaries such as brokers, financial planners, and other types of registered representatives who charge a commission for their services. Shares of front-end load funds are frequently eligible for breakpoints reduction in the commission paid based on a number of variables. These include other accounts in the same fund family held by the investor or various family members, or committing to buy more of the fund within a set period of time in return for a lower commission "today".
It is possible to buy many mutual funds without paying a sales charge. These are called no-load funds. In addition to being available from the fund company itself, no-load funds may be sold by some discount brokers for a flat transaction fee or even no fee at all. (This does not necessarily mean that the broker is not compensated for the transaction; in such cases, the fund may pay brokers' commissions out of "distribution and marketing" expenses rather than a specific sales charge. The purchaser is therefore paying the fee indirectly through the fund's expenses deducted from profits.)
No-load funds include both index funds and actively-managed funds. The largest mutual fund families selling no-load index funds are Vanguard and Fidelity though there are a number of smaller mutual fund families with no load funds as well. Expense ratios in some of these no-load index funds are less than 0.2% per year versus the typical actively-managed fund's expense ratio of about 1.5% per year. Load funds usually have even higher expense ratios when the load is considered. The expense ratio is the anticipated cost to the investor per year. For example, on a $100,000 investment, an expense ratio of 0.2% means $200 of annual expense, while a 1.5% expense ratio would result in $1,500 of annual expense. These expenses are before any sales commissions paid to own the mutual fund.
Many fee-only financial advisors strongly suggest no-load funds such as index funds. If the advisor is not fee only but instead is compensated by commissions, the advisor may have a conflict of interest in selling high commission load funds.
Criticism of managed mutual funds
Historically, actively managed mutual funds, over long periods of time, have not returned as much as a comparable index mutual fund. This, of course, is a criticism of one type of mutual fund over another.
Another criticism covers sales commissions on load funds, an upfront or deferred fee as high as 8.5 percent of the amount invested in a fund. No load funds typically charge a 12b-1 fee in order to pay for shelf space on the exchange the investor uses for purchase of the fund, but do not pay a load directly to a mutual fund broker. Critics point out high sales commissions represent a conflict of interest, as high commissions benefits the sales people, but hurt the investors. High commissions can also cause sales people to recommend funds that maximize their income. Again, this is a criticism of one type of mutual fund over another.
Mutual funds are also seen by some to have a conflict of interest with regards to their size. Fund companies charge a management fee of anywhere between 0.5-2.5 percent of the fund's total assets. Theoretically, this could motivate the fund managers, since a well performing fund would cause the amount invested in the fund to rise and increasing the fee earned. It also could motivate the fund company to focus on advertising to attract more and more new investors, as new investors would also cause the fund assets to increase.
Many analysts, however, believe that the larger the pool of money one works with, the harder it is to manage actively, and harder to have good performance. Thus a fund company can be focused on attracting new customers, hurting its existing investors' performance. A great deal of the funds costs are flat and fixed costs, such as the salary for the manager. Thus it can be more profitable to the fund to try and allow it to grow as large as possible, instead of limiting its assets. Some fund companies, notably the Vanguard Group and Fidelity, have closed some funds to new investments to maintain the integrity of the funds for existing investors.
Other mutual funds have been criticized from time to time, such as funds allowing market timing (many fund companies tightly control this). More recent criticisms have focused on the fund managers accepting extravagant gifts in exchange for trading stocks through certain investment banks, who presumably overcharge the fund compared to what another, non-gifting investment bank would charge. As a result, many fund companies strictly limit -- or completely bar -- such gifts.
Scandals
In September 2003, the United States mutual fund industry was beset by a scandal in which major fund companies permitted and facilitated "late trading" and "market timing". See: Mutual-fund scandal (2003)
Related Topics
Closed-end fund Index fund Investment management Money fund List of mutual-fund families Mutual-fund scandal (2003) Open-end fund Socially responsible investing Unit trust Value investing
End of Wikipedia content
Top Global Mutual Funds
Mutual Fund Reference - General
Mutual Fund Glossary of Terms
Numbers: 12b-1 Fees
A - Active Management, Account Fee, Adjustable Rate Mortgage Funds (Arms), Aggressive Growth Funds, Adviser, Ambac Indemnity Corporation, Annual And Semiannual Reports, Appreciation, Arms (Adjustable Rate Mortgage Funds), Asian Funds, Ask Price, Asset Allocation Fund, Asset-Backed Security, Assets, Automatic Investment, Automatic Reinvestment, Automatic Withdrawal, Average Annual Total Return, Average Life
B - Back End Load, Backdating, Balanced Fund, Balanced Target Maturity Funds, Barbell, Basis Point (Bp), Benchmark Index, Beta, Bid Price, Blue Sky Laws, Bond Fund, Bottom-Up, Breakpoint
C - Call Risk, Capital Appreciation, Capital Appreciation Funds, Capital Gain Distributions, Capital Growth, Cdsc (Contingent Deferred Sales Charge), Certificate, Classes Of Shares, Clone Fund, Closed-End Fund, Closed To New Investors, Collateralized Mortgage Obligation (Cmo), Commercial Paper, Commission, Common Stock Fund, Compounding, Contingent Deferred Sales Charge (Cdsc), Contractual Plan, Conversion, Convertible Security, Convertible Securities Funds, Corporate Bond Funds, Country Funds, Country Risk, Credit Rating (Moody's Aaa, Aa, A, Baa, Ba, Caa, Ca, C; Standard & Poor's Aaa, Aa, A, Bbb, Bb, B, Ccc, Cc, C, Ddd, Dd, D), Credit Risk, Currency Risk, Current Yield, Cusip (Committee On Uniform Securities Identification Procedures), Custodian
D Deferred Sales Charge Depreciation Derivative Distribution Distribution Fees Distributor Diversification Dividend Dollar Cost Averaging Double Exempt Fund Dow Jones Industrial Average (Djia) Dual Purpose Fund
E Emerging Markets Funds Energy Stock Funds Environmental Securities Funds Equity Income Funds Ethical Fund European Stock Funds Exchange Fee Exchange Privilege Exchange-Traded Funds Ex-Dividend Date Expense Ratio Expense
Front-end Load Index Fund Investment Adviser Investment Company
F Family Of Funds Financial Services Funds Fixed Income Security Flexible Portfolio Funds 401(K) Plan 403(B)(7) Plan Front-End Load Fully Invested Fund Of Funds
G General Bond Funds General Municipal Bond Fund Gnma (Government National Mortgage Association). Global Mutual Fund Gold Fund Government Income Fund Growth Growth Fund Growth And Income Fund Growth Index Fund Growth Investing
H Health And Biotechnology Funds Hedge Fund High Current Yield Fund High-Yield Bond Fund Historical Yield
I Inception Date Income Income Fund Index Index Fund Individual Retirement Account (Ira) Inflation Risk Insured Bond Intermediate Investment Grade Bond Fund Intermediate U.S. Government Fund Intermediate U.S. Treasury Fund International Fund Investment Company Investment Grade Investment Objective Investment Style Ira (Individual Retirement Account)
J Junk Bond Junk Bond Fund
L Ladder Large-Caps Latin American Fund Letter Of Intent Lipper Indices Lipper Analytical Services Inc. Liquidity Load Low-Load Long-Term Funds
M Management Fee Usually a % Manager Manager Tenure Market Capitalization Market Index Market Timing Maturity Date Maximum Front-End Load Micro-Caps Mid-Caps Mid-Cap Fund Minimum Purchase Money Market Fund Morningstar Mortgage-Backed Security Municipal Bond Mutual Fund
N Natural Resources Fund NAV (Net Asset Value) Net Asset Value (Nav) Net Assets No Load Fund
O Objective Offering Price Open-End Company Open-End Fund Operating Expenses Option Fund
P Pacific Basin Fund Pacific Ex Japan Funds Payment Date Penalty Plan Periodic Payment Plan Performance Pooling Portfolio Portfolio Manager Portfolio Turnover Precious Metals Fund Prepayment Risk Principal Professional Management Profile Prospectus Purchase Fee
R R-Squared Real Estate Fund Real Return Record Date Redeem Redemption Fee Redemption Price Reinstatement Privilege Repurchase Agreement (Repo) Revenue Bond Right Of Accumulation (Roa) Roa Right Of Accumulation Rollover Russell 2000
S S&P 500 S&P 500 Index Fund S&P 500 Index (Monthly Reinvestment) Sai (Statement Of Additional Information) Sales Charge Science & Technology Fund Sec Yield Sector Fund Series Funds Settlement Date Shareholder Shareholder Service Fees Short-Term Fund Signature Guarantee Small-Caps Small Company Growth Fund Spread-Load Contractual Plan Standard Deviation State Municipal Bond Funds Statement Of Additional Information (Sai) Stock Fund Strip Switching Systematic Withdrawal System Symbol
T Target Maturity Fund Tax-Exempt Bond Fund Taxable Equivalent Yield T-Bill (Treasury Bill) Technology Fund Telephone Switching Top Down Total Annual Fund Operating Expense Total Return Trade Date Transfer Transfer Agent Treasuries - Treasury Bills (T-Bills), Treasury Notes, Treasury Bonds Triple Tax-Exempt Fund Turnover Rate 12b-1 Fee
U Underwriter Unit Investment Trust (UIT) Unrealized Gain Or Loss U.S. Treasury Fund Utility Fund
V Value Investing Variable Annuity Volatility Voluntary Accumulation Plan
W Withdrawal Plan
Y Yield Yield Curve Yield To Maturity (Ytm)
Z Zero Coupon Bond
General Reference
Web Portals
The following portals provide resources on research, directory, search engine / search engines, yellow pages, classifieds
AOL, Yahoo, Google, eBay, YouTube, Yahoo Groups, Wikipedia, CNN, Time, Forbes, Fortune, BBC
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