Visit the Universe of Mutual Funds

It's nice to have a choice. But when you're able to choose from thousands of possibilities, as in the case of deciding which of 8,000 mutual funds to add to your portfolio, a decision can be overwhelming.¹

Evaluating every option would be unrealistic. It may be more effective to identify the type of mutual fund that is appropriate for your situation.

Here are some basic types of mutual funds and why you may want to consider them.

Stock funds pool money from investors to buy stocks. Funds in this category offer widely varying risk levels. Some may own well-established companies that pay regular dividends, whereas others target fledgling companies that have the potential to experience rapid growth because of a newly developed product or service.

Bond funds buy and sell debt instruments issued by government entities and corporations. They may pursue a high current income, capital appreciation, or a mixture of the two. Some funds stick to safer debt such as U.S. Treasury bonds, or they may emphasize high-quality corporate bonds.² Others may invest in high-yield bonds issued by companies with lower credit ratings.³

Hybrid funds include both stocks and bonds. Some may focus on producing income; others may strive for moderate appreciation and current income.

Money market funds invest in vehicles with short-term maturities, unlike stock and bond funds, which are considered to be long-term investments. The objective of money markets is to preserve capital while producing the highest income possible.⁴

Selecting funds for your portfolio can be a complex task. Call today to let us help you determine which type(s) of mutual funds may be appropriate for your personal circumstances.

There are fees and expenses associated with investing in mutual funds, including portfolio management fees and expenses and sales charges. Mutual funds are sold only by prospectus, which contains more information on the objectives, risks, charges, and expenses of the fund. Be sure to read the prospectus carefully before deciding whether to invest. The value of an investment in a mutual fund will fluctuate, so when an investor's shares are redeemed, they may be worth more or less than the original amount invested.

1) Mutual Fund Fact Book, 2004
2) U.S. treasurys are backed by the full faith and credit of the U.S. government as to the timely payment of principal and interest. The principal value will fluctuate with changes in market conditions. If not held to maturity, treasurys may be worth more or less than their original value. Corporate bonds are subject to fluctuating principal value as well as default risk.
3) Investments in high-yield bonds offer different rewards and risks from investing in investment-grade securities. These include higher volatility, greater credit risk, and the more speculative nature of the issuer.
4) Money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market fund attempts to maintain a stable $1 share price, you can lose money by investing in a fund.

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