Mutual Funds
Sold only by prospectus, a
mutual fund is an investment company — a company that makes investments on
behalf of individuals and institutions who share common financial goals. The
fund pools the money with that of other shareholders who have similar
objectives. Professional money managers then use the pool to buy a wide range
of stocks, bonds, or money market instruments that, in the manager's judgement,
will help investors achieve the objectives.
Open End: Continuous share
offering; shares sold by the investor are redeemed by the issuer at net asset
value.
Closed End: Fixed amount
of money; shares are listed and traded above or below net asset value based on
investor supply and demand for the shares.
Types
1. Stock Mutual Fund
Monies are invested in a
portfolio of equity securities.
Investment Objective:
Seeks long-term capital appreciation.
2. High Grade Bond Mutual Fund (Taxable/Tax
Free1)
Monies are invested in a
portfolio of fixed income securities (bonds).
Investment Objective:
Seeks current income from quality investments and the preservation of
principal.
3. Balanced Fund
Monies are invested in
stocks and fixed income securities (bonds).
Investment Objective:
Seeks current income and modest growth in a diversified portfolio.
4. Specialty Funds
Investments in precious
metals, futures, options, technology stocks, etc.
Investors should
consider a fund's investment objective,
risks, charges, and expenses carefully before investing. The prospectus,
which contains this and other important information, is available from your
Financial Advisor and should be read carefully before investing. The
investment return and principal value of a mutual fund investment will
fluctuate, and an investor's shares, when redeemed, may be worth more or less
than their original cost. Prices on existing bonds and, therefore, the value
of bond funds generally decline as interest rates rise. Due to their narrow
focus, specialty funds typically exhibit greater volatility.
1 Some issues may be subject
to state taxes and/or
the alternative minimum tax.
