Class 12 - Mutual Fund A shared investment It offers low...

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Mutual Fund - A shared investment - It offers low cost access to a high quality money manager Advantages - Professional money management - Affordable - Diversification - Flexibility of risk level – YOU choose What are the fees? - Inside the fund Money Manager’s Fee 12b-1 Advertising and marketing fee → Expense ratio - Outside the fund Front End Load A shares Best for the long term. Subtracted from the original investment Back End Load B Shares Highest cost, not recommended Level Load C shares Best for the short term 1% charged to the account at the end of each year More to watch to make a profit… - Inflation: 3-6% - Tax on profits: 15% - Money manager’s fee: 2% - 12b-1 fee (annual): 1% - Load/commission (front, back, or level?): 5.75% Styles of funds - Income/ Equity o High dividends o i.e. Utilities, real estate - Growth o Low dividends o Returns from capital gains - Growth/Income o Steady growth o High dividends o “Blue Chip” companies
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This note was uploaded on 12/01/2011 for the course HDFS 238 taught by Professor Boyce during the Fall '10 term at Michigan State University.

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Class 12 - Mutual Fund A shared investment It offers low...

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