Dollar-Cost Averaging Mutual Fund Pricing
Options
Advantages of Mutual Fund Investing
Mutual Fund Pricing Options
Types Of Mutual Funds Available
Dollar-Cost Averaging
Mutual funds pool the money of many investors who share similar objectives,
creating diversified portfolios under professional management. A mutual
fund may invest its shareholders’ money in stocks, bonds, or both.
Some mutual-fund companies provide families of funds, allowing you to
switch your money from one fund to another as your investment objectives
change.
Many funds allow an initial investment as low as $250-$1,000
and can provide convenient reinvestment of dividends and capital gains.
Many also allow you to take advantage of a proven investment discipline
called dollar-cost averaging—investing the same number of dollars
at regular intervals—through convenient payroll deduction.
We offer a variety of stock, bond, and balanced (stock-and-bond)
mutual funds from several companies—including municipal-bond funds
designed to yield maximum tax-exempt income. We also offer unit investment
trusts (UITs), which provide diversified portfolios of municipal, public
debt, and equity securities.
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Advantages of Mutual
Fund Investing
Whether your goal is a comfortable retirement, education, travel, a
new home or simply to accumulate money for a rainy day, there are mutual
funds that can help you achieve your objective. Mutual funds offer four
distinct advantages:
Professional management. When you
invest in a mutual fund you are hiring full-time professional managers
to buy, sell and monitor your investments. Most mutual funds also
employ research analysts who follow companies closely and interview
corporate executives, suppliers and customers of companies in order
to identify the best possible investments.
Diversification. In a mutual fund,
your money is invested in dozens or even hundreds of securities, a
costly and cumbersome process if you do it on your own. Owning a diverse
mix of securities doesn't eliminate risk, but can reduce it, as the
ups and downs of the individual securities often offset each other.
Quick access to your money. In most
cases, fund shareholders can sell some or all of their shares at any
time and receive the current market value of their investment.
A wide range of convenient services.
You can make your financial life easier by using the special services
offered by most mutual funds: automatic investing and withdrawal,
reinvestment of fund distributions and electronic transfer of funds.
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Mutual Fund Pricing Options
Mutual funds offer a flexible selection of pricing options: Class A,
Class B, and Class C shares.
Class A shares are sold with an up-front sales charge,
which declines as the investment amount increases. For many shareholders—especially
those with significant account balances—this remains the most
cost-effective way to own mutual fund shares.
Class B shares have no up-front sales charge but have
higher expenses than Class A shares. You may pay a fee if you sell shares
within six years of purchase. These shares convert to Class A shares
after eight years, with lower expenses and no redemption fee.
Class C shares do not have an up-front sales charge, but
investors are subject to a 1% contingent deferred sales charge on shares
sold within 12 months of purchase. In addition, investors pay higher
expenses than on Class A shares.
Speak with your Investment Officer to see which type of
shares would be right for you and your investment goals.
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Types Of Mutual Funds Available
Typically, mutual funds are organized into four investment categories:
growth funds, growth and income funds, income funds, and tax-free funds.
Each has its own degree of risk. Your financial advisor can help you
decide which funds are most suitable for your long-term investment goals.
GROWTH FUNDS
Designed to maximize the value of your investment over time, these
funds invest in stocks of companies with a strong potential for above-average
growth.
GROWTH AND INCOME FUNDS
Designed to provide growth and income in varying proportions, these
funds invest in stocks, bonds, or a combination of both.
INCOME FUNDS
Designed to provide a regular stream of income, these funds invest
in interest-paying bonds, dividend-paying stocks, or a combination
of both.
TAX-FREE FUNDS
Designed to provide regular income generally exempt from federal and
certain state and local icome taxes, these funds invest in municipal
bonds.
INTERNATIONAL/GLOBAL FUNDS
Designed to provide capital appreciation by investing in markets located
overseas (international) or those located in any region of the world
(global), these funds offer investment strategies that include growth,
value or a combination of both.
Systematic investing does not assure a profit or protect
against loss in a declining market. The value of mutual funds fluctuates,
so that, when liquidated they may be worth more or less than the original
cost.
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