| TYPES OF MUTUAL FUNDS | | | | •Municipal Bond Funds: Invest in |
| There are many different types of mutual funds | | | | tax-exempt bonds issued by various States and |
| on the market today. In fact, there are more | | | | municipalities. The yield on these investments is |
| Mutual Funds and Exchange Traded Funds (ETFs) | | | | generally tax exempt from federal income taxes. |
| than there are stocks on the New York Stock | | | | •Stock Funds: invest in common stocks. |
| Exchange. Do you know the difference between | | | | They can be very broadly diversified or highly |
| them? | | | | concentrated. There are funds that focus on |
| Here you'll find the various types of mutual funds | | | | growth, others concentrate on value. Some are |
| available for investing: | | | | index funds. Others are International funds that |
| •Loaded Mutual Funds: are sold by full | | | | concentrate their investments outside the United |
| service brokerage firms and carry a fairly steep | | | | States. Global Funds have holdings both |
| commission. | | | | internationally as well as in the United States. |
| •No-Load Mutual Funds: can be purchased | | | | There are sector funds that invest in only one |
| directly from the mutual fund family or from | | | | sector of the market such as energy, healthcare, |
| discount brokers who handle a large number of | | | | or consumer stocks. |
| different mutual fund families. No-Load Funds can | | | | •Exchange Traded Funds (ETFs): is the |
| be purchased with no transaction fees or only | | | | fastest growing segment of the financial industry |
| very small commissions. | | | | today. There are over 500 ETFs from which to |
| •Money Market Funds: offer a place to | | | | choose. Exchange Traded Funds offer all of the |
| park money when waiting to make a new | | | | advantages of Mutual Funds but none of the |
| investment. They offer interest rates more than | | | | disadvantages such as minimum holding periods |
| double that available from bank savings accounts | | | | and early redemption fees. They are priced |
| or checking accounts. | | | | continuously throughout the day and can be |
| •U.S. Government Bond Funds: invest in | | | | purchased and sold just like a stock. Mutual Funds |
| U.S. Treasury Bonds, Notes, or Bills. This is a safer | | | | are priced only at the end of the day based on |
| form of investing than in other types of bond | | | | the net asset value of all of the holdings within |
| funds. | | | | the fund. With the multiplicity of Mutual Funds and |
| •Corporate Bond Funds: invest in the | | | | ETFs from which to choose it is important to |
| debt obligations of U.S. Corporations. These funds | | | | have a system for selecting and trading mutual |
| generate higher yields but involve higher risk. | | | | funds that has stood the test of time. |