19 Facts About Mutual funds

Mutual funds are often classified by their principal investments: money market funds, bond or fixed income funds, stock or equity funds, or hybrid funds.

Primary structures of mutual funds are open-end funds, closed-end funds, unit investment trusts.

Open-end Mutual funds are purchased from or sold to the issuer at the net asset value of each share as of the close of the trading day in which the order was placed, as long as the order was placed within a specified period before the close of trading.

Mutual funds have advantages and disadvantages compared to direct investing in individual securities.

The advantages of mutual funds include economies of scale, diversification, liquidity, and professional management.

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Mutual funds are regulated by governmental bodies and are required to publish information including performance, comparison of performance to benchmarks, fees charged, and securities held.

Mutual funds's aim was to provide small investors with an opportunity to diversify.

Early US Mutual funds were generally closed-end Mutual funds with a fixed number of shares that often traded at prices above the portfolio net asset value.

Batterymarch Financial, a small Boston firm then employing Jeremy Grantham, offered index Mutual funds beginning in 1973 but it was such a revolutionary concept they did not have paying customers for over a year.

Mutual funds are overseen by a board of directors if organized as a corporation, or by a board of trustees, if organized as a trust.

However, the European Union has established a mutual recognition regime that allows funds regulated in one country to be sold in all other countries in the European Union, if they comply with certain requirements.

In Taiwan, mutual funds are regulated by the Financial Supervisory Commission.

Exchange-traded Mutual funds are open-end Mutual funds or unit investment trusts that trade on an exchange.

Open-end mutual funds must be willing to buy back their shares from their investors at the net asset value computed that day based upon the prices of the securities owned by the fund.

Money market Mutual funds invest in money market instruments, which are fixed income securities with a very short time to maturity and high credit quality.

Money market Mutual funds sold to institutional investors that invest in non-government securities must compute a net asset value based on the value of the securities held in the Mutual funds.

Hybrid Mutual funds invest in both bonds and stocks or in convertible securities.

Mutual funds fund pays expenses related to buying or selling the securities in its portfolio.

Typical share classes for Mutual funds sold through brokers or other intermediaries in the United States are:.