A mutual fund is a company that pools
investors' money to make multiple types of
investments, known as the portfolio. Stocks,
bonds, and money market funds are all
examples of the types of investments that
may make up a mutual fund.
The mutual fund is managed by a professional
investment manager who buys and sells
securities for the most effective growth of the fund.
As a mutual fund investor, you become a
"shareholder" of the mutual fund company.
When there are profits you will earn dividends.
When there are losses, your shares will decrease
One of the main advantages of mutual funds is
that they give small investors access to
professionally managed, diversified portfolios of
equities, bonds and other securities, which would
be quite difficult to create with a small amount of
Mutual funds are, by definition, diversified,
meaning they are made up a lot of different
investments. That tends to lower your risk.
• Shares are issued in the fund
whenever anyone wants them
• With closed-ended funds, only a
certain number of shares can be
issued for a particular fund, and
they can only be sold back to the
fund when the fund itself
Refers to the sales charges added to a mutual fund
when you purchase it. The load charge goes to the
fund salesperson as a commission and payment for
their research services.
Load charges can be a front-end load ( you pay it
when you buy the mutual fund) or a back-end load
(you pay when you sell the mutual fund).
Equity funds are made
up of investments of
only common stock.
These can be riskier
(and earn more money)
than other types.
Fixed-income funds are
made up of government and
corporate securities that
provide a fixed return and are
usually low risk.
funds combine both
stocks and bonds in the
investment pool and
offer a moderate to low
A hedge fund is an investment partnership. The
limited partners contribute the money and the
general partner manages it according to the fund's
strategy. A hedge fund's purpose is to maximize
investor returns and eliminate risk, hence the word
HEDGE LIKE FUNDS
A mutual fund that adopts an alternative
investment strategy, much like a hedge fund.
Hedge-like mutual funds aim to increase investor
returns by utilizing investment methods typically
used by hedge funds, while maintaining the
convenience and availability to investors wishing
to invest in mutual funds.
The key differences are that hedge-like funds are
regulated by the SEC(Securities and Exchange
Commission), and potential investors in hedge-like
funds do not need to be considered accredited
investors to invest.