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What are mutual funds?

By ATB Financial 3 October 2018 1 min read

Choosing where to invest your money can be difficult

 

Mutual funds provide a great way to take advantage of a number of factors that will help you reach your investment goals. It is difficult to select investments on your own but a more effective way to make smarter investment choices is to purchase a mutual fund.

With a mutual fund you pool your money with other investors you take advantage of price discounts and lower fees. Mutual funds also allow you to purchase a wide variety of different investments as each fund can hold thousands of individual investments. Normally it is not possible for single investors to buy them all on their own.

Also with mutual funds you get top quality investment management that you likely wouldn't get if you were trying to hire on your own. The cost of the manager is shared with thousands of others and the manager follows a certain mandate depending on the purpose and goals of the fund.

That said, mutual fund fees can vary greatly and the amount you pay indirectly to both the fund manager and your advisory firm does impact your net returns. Be sure you speak with your investment professional and read the Fund Facts prior to purchase, both of which can explain how much of your investment will go to management expenses and trailing commissions which you will always pay regardless of whether the fund value appreciates or declines.

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