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disadvantages of mutual funds
– Lower-than-market performance
– Costs
– Risks
– You can’t diversity away a market crash
– Taxes
mutual funds
pooling money from multiple investors with similar financial goals
diversified portfolio
guided professional manager
investment objectives clearly stated
as the value of securities (stocks, bonds, ) in mutual funds increases…
the value of each mutual fund share rises
most pay dividends or interests to
shareholders
shareholders recieve a captial gains distribution when
the fund sells a security for more than originally paid
a fund is set up as a
corporation or trust owned by shareholders
shaerholders elect a
board of electors
a fund is run by a
managment company
each individual fund hires an investment advisor to
oversee the fund
a fund contracts with
a custodian
a transfer agent
an underwriter
companies invest the pooled money of the investors for a
fee
NAV Net Asset Value
dollar value of a share in a mutual fund
most popular are
open-end investment companies or mutual funds
open end investment companies
accept new investors, issue new shares, grow their assets
closed end invesment companies
cant issue new shares
investors must trade and cannot redeem them
unit investment trusts
a fixed pool of securities
how risky are hedge funds?
very!
hedge funds
pooled funds
Note 
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