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Mutual Funds FAQ



Frequently Asked Questions about mutual funds

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Frequently Asked Questions (FAQ) for misc.invest.mutual-funds is copyright (c) 1997 by Bill Rini, and is protected by copyright as a collective work and/or compilation, pursuant to U.S. copyright laws, international conventions, and other copyright laws. Any user is permitted to store, manipulate, analyze, reformat, print, and display documents from Frequently Asked Questions (FAQ) for misc.invest.mutual-funds only for such user's personal use. In no event shall any user publish, retransmit, redistribute, or otherwise reproduce documents from the Frequently Asked Questions (FAQ) for misc.invest.mutual-funds in any format to anyone. It is specifically prohibited for users to create derivative works from the Frequently Asked Questions (FAQ) for misc.invest.mutual-funds, including but not limited to digests, summaries, books, mirror sites, or framed pages. Limited use of material from this web site under the "fair use" doctrine is permitted for search engines, reviews, and similar purposes.

Disclaimer:

This question and answer list is given in the hope that it is useful, but with no express or implied warranty for accuracy, usefulness, up-to-date-ness, or anything else. Use the information contained in this list at your own risk. Before investing in any mutual fund, be sure to read the latest prospectus for the fund in its entirety. This FAQ should NOT be used in place of competent advice from investment, accounting and legal professionals. This FAQ applies to mutual funds in the USA - most things are likely to differ elsewhere.

-01 What is a mutual fund?
A mutual fund, otherwise known as an investment company, is a corporation ...
-02 Why do people use mutual funds?
Many people purchase mutual funds because they are a convenient and cost ...
-03 Are there any disadvantages to using a mutual fund?
Although what one person may view as a disadvantage another may see as a desirable quality, below are some factors which may be disadvantages depending on your point of view:...
-04 What is a "closed-end fund" vs. an "open-end fund"?
A closed-end fund has a fixed number of shares outstanding and ...
-05 What is "net asset value"?
The net asset value (NAV) is the value of the fund's ...
-06 A fund is "closed". Is that the same as a closed-end fund?
No. Some open-end funds are closed to new investors because ...
-07 What expenses are there for a mutual fund?
(1) Closed-end funds charge annual expenses for research ...
-08 What are typical expenses of a mutual fund?
Stock funds tend to be the most expensive, with annual ...
-09 Can mutual fund performance be guaranteed?
No. As many funds state, past performance is no guarantee ...
-10 What is a "prospectus"?
It is a document which an open-end fund, or newly issued closed-...
-11 What is a "statement of additional information"?
It is a document that is designed to be read along with ...
-12 What is a "signature guarantee"?
It is a guarantee by a financial institution that your ...
-13 What are "dividend distributions"?
A mutual fund may receive dividend or interest income from ...
-14 What are "capital gain distributions"?
A mutual fund may, in the process of trading, realize ...
-15 What else is there to know about distributions?
A distribution lowers the net asset value of the fund by ...
-16 What is the difference between yield and return?
Do not confuse the two terms....
-17 What do mutual funds invest in?
Almost anything. There are funds that invest in almost ...
-18 What is a "socially responsible" fund?
In addition to the usual investment goals, these funds ...
-19 Where can I get comparative information on mutual funds?
Brokers and financial advisors offer information, but ...
-20 How does buying funds directly compare with buying through a broker?
A load fund usually costs the same whether bought directly ...
-21 What does family of funds do compared to a single fund?
Families of funds sometimes offer additional services, such ...
-22 What are the tax implications of mutual funds for individuals?
Like shares of any stock, selling mutual fund shares may cause you ...
-23 What dates are important when investing in mutual funds?
There are several important distribution related dates to be aware ...
-24 How do I put mutual funds in an IRA?
Most funds have a bank or trust company arranged to be an IRA ...
-25 What are the various forms of mutual fund account registration?
The way in which your mutual fund account is registered is an ...
-26 What resources are available on the Internet?
Following is a list of some Internet resources available which ...
-27 Are there any mutual funds that don't require a large purchase?
Contributed by David Snowball (spsnowball@augustana.edu)...
-28 How accurate are the mutual fund prices in the newspaper?
According to the Investment Company Institute (ICI) fund pricing is almost ...
-29 Can mutual funds trade on margin?
While some brokerage firm margin policies may allow for an investor to ...
-30 Who is the typical fund owner?
According to several surveys by the Investment Company Institute (ICI) conducted over the last several years:...
-31 How are mutual funds structured?
Mutual funds are in their most basic form corporations. Investors ...
-32 When should I sell a mutual fund?
While one could never hope to cover every circumstance that would ...









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