Mutual Funds Lesson 3.2 Investigate Mutual Funds Today’s AIM Describe an expense ratio and why is it important. Explain where to go for information on mutual funds. Lighten the Load Load Funds – Charge an up front sales commission or a “load” on your investment. No-Load Funds – No sales fee. – If you learn to make your own mutual fund decisions you can buy No-Load funds and have more money to invest. Expense Ratio In addition to loads or commissions, a number of other fees are charged with mutual funds. These fees are part of the fund’s expense ratio. – Expressed as a percentage of assets deducted each year for fund expenses – Avoid funds with expense ratios higher than 1.5% Evaluating a Mutual Fund Mutual Fund Table – Name – NAV – Net Asset Value, per share value calculated by the fund. – NET CHG – Gain or loss in NAV, based on prior day’s NAV. – YTD% RET – The percent return for the year to date. In-Depth Information There are several sources to find information on Mutual Funds. Magazines – Forbes, Money, Business Week, Kiplinger’s, and Consumer Reports. Internet (of course), here are a few sites – www.investorama.com – www.quicken.com – www.mfea.com Review today’s Aim Describe an Expense Ratio, and why is it important. Explain where to go for information on mutual funds.
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