Mutual Fund Industry |
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WHAT IS A MUTUAL FUND? Mutual funds got their start in the 1800s, when shares in investment trusts were sold to British investors. The first U.S. fund got off the ground in 1924, and Canadas first fund was established in 1932. Since then, they have grown rapidly, and today, Canadians have over $300 billion invested in mutual funds. As their popularity has grown, so has the number of offerings from the mutual fund industry. Currently, you can choose from over 2,200 different funds. They are popular with both novice and sophisticated investor's alike offering both a convenient and affordable way to invest in Canada and around the world. There are many types of mutual funds that can be placesd under three broad headings:fixed income, equity-income, and equity-growth securities. Each fund grouping has characteristics particular to that group and contains several mutual funds that share specific features and benefits.
Stock Market Volatility Is Not New
Stocks and Mutual Funds outperform GIC's and Bonds over the long term Monthly Returns, TSE 300 June 1988 - June 1998 Fixed-income Equity-income Equity-growth The Benefits of Mutual Funds Offers Professional, full-time management Each fund employs a full-time manager who has the latest in analytical tools,
communicates regularly with, and visits
the corporate management of the companies in which they
invest, enjoys ready access to analysts' opinions all over the world and has the capacity
to compare potential investments with all the competing opportunities available worldwide.
Supported by
researchers, they continually sift through the range of investment opportunities that meet
their funds criteria to select the ones that best meet the stated goals of the fund.
They read research reports,
analyze financial statements, talk to customers and clients, consider economic data, and
evaluate future potential using their experience and insight. Diversification To achieve this level of diversification on your own, you would have to spend a great
deal of time selecting the investments for your portfolio, assuming you even knew how to
assess their potential. You would also need to have several thousands of dollars to
invest; otherwise the commissions on your purchases would be too costly. Finally, you
would have to devote even more time to monitoring and managing your portfolio. Risk Levels Affordability By contrast, many mutual funds allow you to invest as little as $1,000 or even $500.
And if you sign up for a plan that automatically takes money out of your account and
invests it in a mutual fund (often referred to as a "preauthorized purchase
plan"), you may be able to invest as little as $25 a month. And no matter how small
your investment, it will get the same high level of attention and expertise that every
other dollar in the fund receives. Thus, there is a type of fund to meet almost every investment objective - each offering different levels of risks, return and income. That does not mean wealthy investors should ignore mutual funds. The same benefits
apply to everyone, whether you have invested $1,000 or $1,000,000. Low Cost | ||||||||||
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