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