The Benefits of
Mutual Funds

Professional Investment Management:

By pooling the funds of thousands of investors, mutual funds provide full-time and high-level professional management that few individual investors can afford to obtain independently.

Such management is vital to achieving results in today's complex markets. Your fund managers' interests are tied to yours, because their compensation is based not on sales commissions, but on how well the fund performs.

These managers have instantaneous access to crucial market information and are able to execute trades on the largest and most cost-effective scale.

In short, managing investments is a full-time job for professionals.

Diversification:

Mutual funds invest in a broad range of securities. This limits investment risk by reducing the effect of a possible decline in the value of any one security.

Mutual fund shareowners can benefit from diversification techniques usually available only to investors wealthy enough to buy significant positions in a wide variety of securities.

Low Cost:

If you tried to create your own diversified portfolio of i.e. 50 stocks, you'd need a very large amount of money and you'd pay thousands more in commissions to assemble your portfolio.

A mutual fund lets you participate in a diversified portfolio for as little as $500 and sometimes less.

Convenience and Flexibility:

You own just one security rather than many, yet enjoy the benefits of a diversified portfolio and a wide range of services.

Fund managers decide what securities to trade, clip the bond coupons, collect the interest payments and see that your dividends on portfolio securities are received and your rights exercised.

It's easy to purchase and redeem mutual fund shares, either directly online or with a phone call.

Total Liquidity and Easy Withdrawal:

You can easily redeem your shares anytime you need cash and the proceeds are usually available within a day or two.

Life Cycle Planning:

You can link your investment plans to future individual and family needs -- and make changes as your life cycles change.

You can invest in growth funds for future college tuition needs, then move to income funds for retirement, and adjust your investments as your needs change throughout your life.

Market Cycle Planning:

For investors who understand how to actively manage their portfolio, mutual fund investments can be moved as market conditions change.

You can place your funds in equities when the market is on the upswing and move into money market funds on the downswing or take any number of steps to ensure that your investments are meeting your needs in changing market climates.

A word of caution: since it is impossible to predict what the market will do at any point in time, staying on course with a long-term, diversified investment view is recommended for most investors.

Investor Information:

Shareholders receive regular reports from the funds, including details of transactions on a year-to-date basis. The current net asset value of your shares (the price at which you may purchase or redeem them) appears in the mutual fund price listings of daily newspapers.

Types of Mutual Funds