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 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. The mutual fund raises money by selling its own shares to investors. But, like investing in any security, investing in a mutual fund involves certain risks, including the possibility that you might lose money.Ī mutual fund is an investment company that pools money from many investors and invests it based on specific investment goals.
#TOTAL EXPENSE RATIO PROFESSIONAL#
Because mutual funds can offer built-in diversification and professional management, they offer certain advantages over purchasing individual stocks and bonds. Mutual funds are a popular way to invest in securities. It’s important to read a mutual fund’s prospectus to learn about its objectives, investments, strategies and costs.Your investment professional might receive higher (or lower) commissions or payments for the sale of one share class relative to another.
A mutual fund may have different share classes with different costs.Use FINRA’s Fund Analyzer to analyze and compare the costs of owning specific funds. All mutual funds have fees and expenses.Some focus on a particular industry or region. Some funds invest in a particular product, such as stocks or bonds. Each mutual fund has a different investment objective.Mutual funds can offer cost-effective diversification.
Mutual funds pool the money of many investors to purchase a range of securities to meet specified objectives, such as growth, income or both.
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