A mutual fund combines money from many investors and uses it to purchase a diversified portfolio of investments.
Depending on the fund, those investments may include stocks, bonds, short-term securities or a mix of different asset classes.
Mutual funds are typically managed by professional portfolio managers and can provide a convenient way to diversify without selecting every individual investment yourself.
Why Consider Mutual Funds?
Diversificataion
A single fund can hold many different investments, helping spread risk across multiple securities.
Professional Management
Portfolio managers research, select and monitor the investments held inside the fund.
Broad Choice
Mutual funds are available for many goals, risk levels, asset classes and investment strategies.
Explore Mutual Fund Types
Equity Funds
Invest primarily in stocks and generally focus on long-term capital growth.
Use this table later when you have real fund data.
Dates updated
Fund Type
Expense Ratio
Minimum Investment
Risk Level
Primary Focus
Equity Fund
—
$-
Higher
Growth
Bond Fund
—
$-
Moderate
Income
Balanced Fund
—
$-
Moderate
Growth + income
Index Fund
—
$-
Varies
Market tracking
Money Market Fund
—
$-
Lower
Liquidity
Target-Date Fund
—
$-
Changes over time
Retirement
Disclaimer: Fund expenses, minimums, performance and risk vary by investment company and specific fund. Past performance does not guarantee future results.
What Can Affect Mutual Fund Performance?
Market Conditions
Stocks and bonds can rise or fall based on economic and financial market conditions.
Fund Strategy
The investments a fund holds and how actively it is managed can affect returns.
Fees
Management fees and operating expenses reduce the return investors ultimately receive.
Interest Rates
Changes in interest rates can significantly affect bond funds and other fixed-income investments.
Diversification
The mix of industries, securities and asset classes can influence volatility and performance.
Time Horizon
Longer investment periods can provide more time to recover from short-term market declines.
Who May Consider Mutual Funds?
Mutual funds may be worth considering if you want diversified investing without selecting and managing every individual security yourself.
Common Reasons
Building a diversified portfolio
Saving for retirement
Long-term wealth building
Investing for education
Seeking professional management
Adding bond or stock exposure
Simplifying portfolio management
Benefits and Things to Consider
Benefits
Built-in diversification
Professional management
Many investment strategies available
Accessible to a wide range of investors
Can support long-term financial goals
Things to Consider
Investment values can decline
Fees vary significantly between funds
Some funds charge sales loads
Investors have limited control over individual holdings
Tax distributions may occur in taxable accounts
Mutual Funds vs. Other Investments
Mutual Funds
Professionally managed pooled portfolios that may hold stocks, bonds or other securities.
