How To Evaluate And Choose Mutual Funds. By Anthony C Caruso|

1704 WordsMar 15, 20177 Pages
How to Evaluate and Choose Mutual Funds By Anthony C Caruso | Submitted On September 07, 2012 Recommend Article Article Comments Print Article Share this article on Facebook Share this article on Twitter Share this article on Google+ Share this article on Linkedin Share this article on StumbleUpon Share this article on Delicious Share this article on Digg Share this article on Reddit Share this article on Pinterest Expert Author Anthony C Caruso Many investors today utilize mutual funds as part of their overall investment plan. Whether you must make your own mutual fund selections for your 401(K) or employer sponsored retirement plan, or use a professional investment advisor for other types of investment accounts, mutual funds can…show more content…
Closed-end funds have a fixed number of shares issued to the public. If you want to purchase a piece of the fund, you have to purchase an existing share from a shareholder that is selling. Open-end funds have an unlimited number of shares. If you want to purchase a piece of the fund, the fund creates a new share and sells it to you. There are significantly more open-end funds than there are closed-end funds. Closed end funds can trade at values that are above or below their NAV, while open end funds only trade at their end of day NAV. Mutual Fund Research - Do Your Homework Expenses All mutual funds have expenses. Some funds ' expenses are low while other funds ' have very high expenses. These include everything from the advisory fee paid the fund manager to administrative costs like printing and postage. With a little bit of homework, you can determine a fund 's expenses before you invest. This is important because those expenses can have a dramatic effect on your investment returns. The three expenses you should be aware of are loads, redemption fees and operating expenses. Loads are commissions or fees that can be charged either when you buy or sell a mutual fund. A front-end load (usually associated with class "A" shares) can be up to 8.5% of your investment. A back-end load (usually called redemption fees, are associated with class "B" shares) can also be quite high, but reduces over the years, the longer you keep your investment in the fund.

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