What are Mutual Funds?
Section 29 Module 6
- When you buy a Mutual Fund, you are buying the ‘Expertise’ of a Fund Manager, who makes the investing decisions.
- Mutual funds invest in stocks, bonds, ETFs, Commodities like gold, silver, food items, petroleum, etc...
- Most mutual funds are based on investment themes or invest in a country or countries as a whole.
- Mutual Funds exist because most people cannot afford to hire a fund manager to manage their money.
- Very few mutual funds are capital protected, and very few of them perform better than equivalent ETFs.
Remember - Although ETFs are cheaper than mutual funds, there are the select few mutual funds that have unique features such as downside protection, or profit sharing models, that ETFs simply cannot offer. Your financial advisor can help you select the best mutual funds that complement your portfolio of ETFs.