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
Data Source: Morningstar Investing Classroom
2. Mutual Fund Benefits
Easy to buy and sell
Financial Advisors
Directly through fund family
Fund Supermarkets (e.g. 401k)
Regulated and Professionally
managed
Data Source: Morningstar Investing Classroom
3. Quick Quiz
Investing in a stock mutual fund does
NOT offer you
A.
B.
C.
Indirect ownership of a group of
companies
Regulation by the SEC
An insured investment
Answer is “C”
Data Source: Morningstar Investing Classroom
4. Quick Quiz
A fund’s price per share is called its:
A.
B.
C.
Stock price
Net Asset Value (NAV)
Initial Investment
Answer is “B”
Data Source: Morningstar Investing Classroom
5. Quick Quiz
Who owns Fidelity Magellan Fund?
A.
B.
C.
Fidelity
Fidelity Magellan’s Board of
Directors
Fidelity Magellan’s shareholders
Answer is “C”
Data Source: Morningstar Investing Classroom
6. Quick Quiz
Which of the following statements is false?
A.
B.
C.
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”
Data Source: Morningstar Investing Classroom
7. Quick Quiz
All mutual funds registered through the
Investment Act of 1940 increase the
number of shares by IPO’s, secondary
offerings, and share repurchases.
A.
B.
True
False
Answer is “B”
Data Source: Morningstar Investing Classroom
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!
Data Source: Morningstar Investing Classroom