Mutual funds are most investment favorites in USA. In 2001, there are more than seven thousands mutual funds in USA. Today there is more than millions household who invest in mutual funds. Unfortunately, the crisis makes this investment become less popular. Sometimes, some investors do not understand mutual funds. I hope this hubs will give you some knowledge about mutual fund.

Ten question or frequently asked questions (FAQ) are:

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What is mutual fund?

Mutual fund is a bunch portfolio of investment. Investment Manager may use investment vehicles like stock, bond, index, money market, precious metal, etc so that they can gain profit and back to you.

What is kind mutual?

There are categories of mutual fund. There is open-end and close-end mutual fund and open-end mutual fund. There is also mutual fund various base on investment policy. There mutual funds are equity funds, fixed-income securities, balanced fund, index fund, money market fund, specialized sector, etc. These kind funds are suitable with different type investor.

Can we invest in limited fund?

Yes, you can. One of advantages they you can invest in limited fund. You can invest in variety investment like stock, bonds, index, market money, etc with limited money. For example, some mutual fund price is only $ 100. If you want buy stock, you need at least $ 10,000.

Where can investor buy mutual funds?

Mutual Fund Company will give exclusive right to other financial institution to sale mutual fund e.g. bank or insurance company.  

What is NAV?

Net Asset Value (NAV) is share price of mutual fund. NAV price is similar with company stock price. Some Newspaper always announces NAV every day. You can buy mutual fund at price with NAV that effective that day. For example, information announces a mutual fund NAV is about $25 today so you can buy mutual fund for $25.

What is mutual fund return?

Mutual fund will give return from raising NAV. They give you dividend and interest rate too.

Is there risk investment?

Yes there is. There is also risk investing in mutual fund. Your NAV will descent anytime so that your assets will go down too. When you sell at low NAV meaning, you suffer financial loss.

The volatility of NAV depends on your mutual fund portfolio. When all bonds price down, your fixed-income mutual fund will down too.

Can we sell our mutual fund anytime?

Yes, investor could redeem anytime they want. Consequently, for open-end mutual funds, you must wait until their sponsor finish the count of NAV or in the afternoon. They must buy stock, bond index depend on your mutual fund.

Is mutual fund manager a good manager?

Yes, most of the investment manager in mutual funds is experienced investment manager but this is not guarantee that you always have return periodically. You must realize that manager is human too that can make mistakes.

What are sponsor charges?

Mutual funds will charge you with some fees. This fee is for funding operational company. There fee are Front-end load, Back-end load, 12b-1 and operating expenses. Sponsor will charge you front-end load when buy mutual fund. When you redeem mutual funds, you have to pay back-end load to sponsor. You must pay 12b-1 and operating expenses to sponsor.