Mutual Funds

An Explanation of Mutual Funds for New Investors

Many new investors need an explanation of mutual funds to help them differentiate investing in funds from other types of investments. A mutual fund is a company that collects money from many people for investment in stocks, bonds, or other types of assets. Each investor in the fund owns a portion of the [...]

Mutual Fund Cost Basis Calculator

Mutual fund investors need to understand their cost basis in order to arrive at a capital gain or loss for tax purposes. The calculation for mutual fund cost basis can be somewhat challenging as there are a number of factors that can impact your cost basis over time.

Blend Fund Investing for Diversification

A blend fund or “hybrid fund” is a type of mutual fund with multiple types of assets, including stocks, bonds, money market and other types of securities. While the goal of a blend fund is in diversifying the portfolio for investors and offering greater stability than other types of funds, the composition can vary greatly [...]

What is a Mutual Fund 12b-1 Fee?

A 12b-1 fee, also known as a “trailing commission” or “hidden fee” is an annual marketing or distribution fee charged by some mutual funds. The Financial Industry Regulation Authority (FINRA) allows funds to charge 12b-1 fees of up to 1.00% on an annual basis and the fee is considered an operational expense for the [...]

Understand the Different Mutual Fund Classes

Some mutual funds, known as ‘multi-class funds” offer investors more than one “class” of shares to choose for investing. While each class represents the same level of interest in the fund’s portfolio, they differ in how investors are charged sales and distribution fees. Under the multi-class structure, investors can choose a fee and [...]

A Mutual Fund Calculator to Track Returns

A mutual fund is a professionally managed investment vehicle in which money is pooled from a large number of people for investments in securities that may include stocks, bonds, money market, or other types of securities. The manager of the fund oversees the trading activity within the fund to achieve the fund’s stated goals [...]

What the Mutual Fund Turnover Ratio Means

Mutual fund turnover ratio is a measure of the changes in a mutual funds assets for a given period of time, usually one year. Mutual fund turnover is calculated by dividing the value of both the purchase and sale transactions for the period by two and dividing that figure by the total holdings of [...]

What is a Systematic Withdrawal Plan?

A Systematic Withdrawal Plan (SWP) is a service provided by mutual funds to offer specific payment amounts to shareholders at defined time intervals. A common way to set up a systematic withdrawal plan would be for the investor to deposit a lump sum of money and make arrange for withdrawals on a monthly, quarterly, [...]

Reasons to Sell a Mutual Fund

For many investors the decision to sell a mutual fund starts and ends with the performance of the fund, with the argument is that the best way to evaluate mutual fund performance is against a benchmark. While there are a number of different benchmarks that are widely tracked, most professional money managers look to an [...]

Calculate the Net Asset Value of a Mutual Fund

The term Net Asset Value (NAV) refers to the price per share of a mutual fund or the per-share value of an exchange-traded fund (ETF). The value is calculated by dividing the total net value of the securities by the number of shares in the fund. The net asset value functions in a [...]