What is a Mutual Fund

1
What is a Mutual Fund?

• Brings groups of investors together
• Actually buying shares of the fund
• Number of shares depend upon investors
• Net Asset Value (NAV) issues

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2
Mutual Fund Benefits

• Easy to buy and sell
• Financial Advisors
• Directly through fund family
• Fund Supermarkets (e.g. 401k)
• Regulated and Professionally managed

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3
Quick Quiz

• Investing in a stock mutual fund does NOT offer
  you
• Indirect ownership of a group of companies
• Regulation by the SEC
• An insured investment
• Answer is C

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4
Quick Quiz

• A funds price per share is called its
• Stock price
• Net Asset Value (NAV)
• Initial Investment
• Answer is B

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5
Quick Quiz

• Who owns Fidelity Magellan Fund?
• Fidelity
• Fidelity Magellans Board of Directors
• Fidelity Magellans shareholders
• Answer is C

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6
Quick Quiz

• Which of the following statements is false?
• When you own a fund, you own all the securities
  in that fund when you sell the fund, the fund
  transfers ownership of those securities to you
• When you own a fund, you pay a manager to choose
  securities for you
• You can sell a closed fund, but you cannot buy
  one
• Answer is A

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7
Quick Quiz

• All mutual funds registered through the
  Investment Act of 1940 increase the number of
  shares by IPOs, secondary offerings, and share
  repurchases.
• True
• False
• Answer is B

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8
Coming Next

• Mutual fund fees and taxes
• Down the road
• Mutual funds vs. I-shares
• Best mutual funds of 2002
• and much, much more!

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