- Common types of mutual funds
- Exchange Traded Funds and Index Mutual Funds Compared
As they become more widely known, exchange traded funds (ETFs) are growing in popularity with investors. ETFs offer investors the ability to invest in a large and growing number of market indexes or sectors. While ETFs and index mutual funds have many similarities, they also have a number of important differences.
- Mutual fund basics
When you buy shares of a mutual fund, you're buying into a portfolio of securities. There are many types of funds, and you should always read the prospectus before investing. Essentially, you are buying diversification that would be difficult to achieve on your own. As you make your selection, consider when you'll need to take money out of the fund and identify your tolerance for risk. You'll also want to consider a fund's past performance and look for a manager who has been with the fund for several years.
- Understanding mutual fund share classes
Some mutual funds allow you to choose among several share classes, most commonly Class A, Class B, and Class C. When choosing a share class, keep in mind how much you want to invest and your investment time horizon.
- What You Can Learn from a Mutual Fund Prospectus