| Mutual Funds are a very common way of | | | | your funds. |
| investing. In theory they are a professionally | | | | There are many different types of funds, the |
| managed investment that is diversified into a | | | | major types are: |
| range of securities including stocks, bonds and | | | | Exchange Traded Funds |
| other securities. The person who manages the | | | | These are relatively new and are aimed to track |
| fund is known as the "Fund Manager" or "Portfolio | | | | a specific security. Common ETFs track major |
| Manager". It is the fund managers responsibility to | | | | stock indices, commodities and metals. |
| buy securities taking a speculative view that they | | | | Equity Funds |
| will appreciate in value. | | | | These mutual funds are the most popular. They |
| There are many people who have some money | | | | invest a large proportion of the pool into stocks. |
| to invest and would like to earn a better rate | | | | Bond Funds |
| than the basic benchmark rate. Investing in mutual | | | | These funds invest in both government and |
| funds offers the opportunity to do this in a trade | | | | corporate bonds. Often it is better to buy the |
| off for some risk. It is important one does some | | | | bonds directly. |
| research on different mutual funds because a lot | | | | Fund of Funds |
| of products on the retail market are very poor. | | | | These funds invest in a selection of funds, in an |
| One thing to be weary off with mutual funds is | | | | attempt to give you a diverse portfolio. They are |
| the fund managers get paid even in they perform | | | | often best suited to people who don't currently |
| very poorly, so they are essentially earning | | | | have enough money to invest in a broad range of |
| commissions and earn well if they lose some of | | | | funds. |