4. Pooled Investments

e. describe mutual funds and compare them with other pooled investment products.

What are “pooled” investments? “Pooled investments” is a term given to a wide range of investment types, such as mutual funds, exchange traded funds, and separately managed accounts.

What is a mutual fund? An investment company invests a pool of funds belonging to many individuals in a single portfolio of securities. In exchange for this commitment of capital, the investment company issues to each investor new shares representing his or her proportional ownership of the mutually held securities portfolio (commonly known as a mutual fund).

What is the mutual fund fee called “front-end load”? A sales commission which is a percentage of the investment, charged at the time of purchase.

What is the difference between a load fund and no-load mutual fund? - A load fund has sales commission charges. - A no-load fund imposes no initial sales charge.

What is a redemption fee (back-end load)? A charge to exit the fund, which discourages quick trading turnover.

What are the four types of mutual funds? 1. Money market funds 2. Bond mutual funds 3. Stock mutual funds 4. Hybrid/balanced funds