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