Saturday 30 April 2011

Mutual Fund Cost Structure

Mutual funds are among the dominant investment vehicles today. They are marketed to the public either directly by the fund underwriter, or indirectly through brokers. An underwriter possesses exclusive rights to distribute shares to investors, while brokers act on behalf of the underwriter. Direct- marketed funds are traded through various means of communication: Internet, over the phone, downtown offices, mail, etc. However, more than half of the mutual funds are sold through brokers and financial advisors who receive hefty commissions for executing the trade.

Prospectus

Every mutual fund has particular investment policies that are explicitly defined in the form of prospectus. A prospectus is a legal uniform disclosure, describing the key investment objectives, considerations and policies that will govern the asset management of the fund. The prospectus is annually updated to reflect the current economic condition and trends. It also addresses the risk and cost associated with trading the shares of stock within the fund. Mutual funds are not free investment tools. Running a mutual fund involves cost. Basically, there are three general classes of fees the fund is subject to: front- end load, back-end load, and 12b-1 charges.

Front-End Load

A front-end load is a broker commission or a sales charge the investor pay when buys shares. These charges rarely exceed 8.5% of the fund. A mutual fund is characterized as a low-load fund if it has loads that range up to 3% of invested funds, and as a no-load fund if it faces no front-end charges. Undoubtedly, no-load funds distributed directly by the mutual fund are the cheapest and usually the most profitable alternative, suitable for young investors who have a long-term investment horizon.

Back-End Load

A back-end load, also known as "contingent deferred sales charges", is a redemption charge incurred when you sell back your shares to the fund. In most cases, back-end load fee is below 6% as it decreases by 1 percent for every year you keep your money within the fund. Following the pattern, by the fourth year the redemption fee will fall to 3%.

12b-1 Charges

The Securities and Exchange Commission (SEC) allows mutual funds managers to use fund assets for both: distribution and shareholders service expenses. A 12b-1 plan is design to cover fund’s operating expenses, such as advisory fees to the investment manager, administrative and marketing expenses, the printing and mailing of prospectuses to investors, as well as shares presented for redemption. 12b-1 fees are usually expressed as a percentage of the total assets of the fund and range from 0.2% to 1%. 12b-1 charges are periodically deducted from the fund assets. The reduced portfolio value results in decreased shareholders’ equity.

Classification

Many funds offer securities rating within the portfolio. The cost structure of these mutual funds is based on shares classification. For example, Class A shares are subject to front-end loads, while Class B and Class C shares usually deploy a combination of back-end load and 12b-1 charges. Make sure you choose the combination of fees that best serves your investment goals and expectations.

Mutual Funds Ratings

A mutual fund employs investment advisors who pool together people's money and invest in stocks, bonds and other securities in accordance with the fund's mandate. People, who invest in a mutual fund, are issued shares that have sufficient liquidity, thus ensuring that the investors can sell shares that have appreciated in value and accrue capital gains. Investors also receive interest and dividend income that may be disbursed in the form of money or additional fund holdings. Although, the fund's investment advisors are registered with the SEC and are expected to have considerable expertise in selecting appropriate investments, the investor has the responsibility of evaluating a fund's prospects before undertaking an investment. This may seem like a daunting task but with a bit of research, one may be able to distinguish a performance oriented fund from a non-performing one. The article on "Mutual Fund Investment Advice" provides a general introduction to mutual funds. This coupled with a good understanding of mutual fund ratings can help an investor choose an appropriate fund.

Understanding Mutual Funds Ratings

Mutual fund rating agencies save investors the time and the effort of having to assess the funds on their own. Generally, people rely on the ratings provided by Morningstar and Lipper. Both Morningstar and Lipper use a ranked system of ratings for mutual funds. The former uses stars while the latter relies on numbers. The stars or the rankings are assigned in ascending order of performance. The best performing fund has a 5 star rating (Morningstar) or ranks 5 on a scale of one to five (Lipper).

Analyzing the mode of assigning ratings to a Domestic Equity fund may help us understand the manner in which Morningstar assigns mutual fund ratings. Morningstar categorizes a domestic equity fund into one of the following 9 categories, viz. Large value, Large blend, Large growth, Small value, Small blend, Small growth and Medium value, Medium blend and Medium growth. To classify the equity fund into one of the aforementioned categories, the underlying stocks in the mutual fund are classified on the basis of valuation and market capitalization.

Relative valuation helps in classifying stocks as undervalued or overvalued. The ratio between the market price of a stock and the earnings per share gives P/E. The P/E of a stock is compared to a benchmark and a stock with a P/E ratio, that is higher than the benchmark, is classified as a growth stock while a stock with a lower P/E ratio is believed to be a value stock. PEG, which is the ratio between P/E and the growth rate of the stock, should be used along with P/E to determine whether the high P/E is really justified by the growth rate. Funds, that demonstrate both growth and value characteristics, are referred to as blend funds. In other words, we have a table with 3 columns, viz. growth stocks, blend and value stocks.

Market capitalization, that is defined as the product of the current price of a share with the number of outstanding shares, is used to classify each of the underlying stocks in a domestic equity mutual fund as large cap (large), mid-cap (medium) or small cap (small). Thus, we end up with a style box that has 3 rows of market capitalization and 3 columns of valuation.

Classifying each underlying stock, of the equity fund, on the basis of valuation and market capitalization culminates with the classification of the fund into one of the aforementioned 9 categories. After categorizing a fund into the style box, its past performance is compared to other funds within the same style box and stars are assigned on the basis of risk adjusted returns. Just like the domestic equity style box, Morningstar offers the international equity style box and a fixed-income style box. It also provides gold mutual funds ratings.

Lipper also categorizes funds before comparison. However, Lipper does not compare the fund to other funds within the same category but compares funds to a benchmark for each category. Moreover, the process of categorizing funds reflects the areas where the fund invests, the amount of flexibility used by the fund manager and the extent to which the fund is aggressively managed.

Limitations of Mutual Funds Ratings

Morningstar and Lipper assign ratings by comparing the fund's past performance with that of comparable funds, within the same category, and with the benchmark for each category respectively. Since past performance is not indicative of future results, it is not prudent to rely solely on ratings of mutual funds.

One needs to look at the performance of long tenured fund managers, the Expense ratio and the Turnover ratio in addition to ratings. Absence of load fees or low load fees in addition to low / no 12b-1 (promotion and distribution) fees are some of the characteristics of a good fund. The ratio between the fund's annual operating expense and the fund's average net assets gives the Expense ratio. A low expense ratio is again a desirable feature. The mutual fund's Turnover is defined as the ratio between the gross sales proceeds and the total assets of the mutual fund. Frequent trading reduces returns on account of high commissions and spreads. Moreover, the shareholder is expected to pay taxes on the yearly capital gains, that are received, thus diminishing return on investment. Hence, a low Turnover ratio is favorable. It's also sensible to investigate whether the fund manager believes in his / her picks and invests heavily in the fund. Going through the Statement of Additional Information (SAI) will help an investor determine whether the fund manager invests in the fund. It's evident that top rated mutual funds need not be the best performers, since past cannot be relied upon to predict the future.

Mutual Fund Investing for the Layman

These days, the term "Mutual Fund" is known to many; whether or not they have parked their money in this investment avenue. However, for the small investor, the understanding of Mutual Funds is limited to the basic definition of "a pool of money invested in stocks or interest bearing instruments" by a team of experts in the field. But that definition alone is not enough to entrust one’s hard earned savings in the hands of strangers, even though many have invested in the mutual fund avenue and quite a few have seen handsome gains.

So what exactly is a Mutual Fund? In broad terms, it is an investment avenue where you can put in a small amount of money to have access to high-priced stocks and bonds through the medium of collective funding. For example, if the stock of Company A is available in the market at, say, $10 per unit, then with an investment of $100 you can get ten of these units. However, odd lot trading, i.e.; buying and selling in quantities lesser that the "lot size" (Minimum number of units that would readily find buyers owing to market and/or statutory restrictions) is very difficult in most markets. Also, if you have only $100 to invest, it is definitely riskier to put the entire amount in one stock – a downturn in the industry to which it pertains could kill the value of the stock in no time. It is in this scenario that the concept of mutual funds comes into play. With, say, a hundred investors pooling in with $100 each, in all $10,000 is available for investing, thereby giving the pool a lot of leveraging power in terms of the type and number of stocks to invest in. This not only minimizes the risk involved as the money is invested in different stocks; it also eliminates the problems associated with odd lot trading.

Types of Mutual Funds

The stock market has evolved a lot since the days of Dow Jones to the Greenspan of today, and mutual funds have ridden this wave of change as a mode of diversification of risk. Based on the risk return approach, a number of sector intensive funds have come up, which can broadly be categorized as follows:

Equity Funds: These mutual funds invest in equity shares of corporations, and being purely driven by the price movements of stocks, they carry high risks though the potential for profits is also higher. Again, depending upon their industry focus, these mutual funds may be sector oriented (such as technology funds which invest mostly in stocks of emerging technology companies or pharma funds which invest heavily in pharmaceutical companies) or they may have diversified portfolios comprising of stocks from different sectors.

Debt Funds: These funds invest heavily in debt oriented instruments; i.e; instruments which carry periodic interest. Thus, these funds invest in G-Secs (Government papers and Treasury Bills) and Debt Instruments such as Bonds, Debentures, zero-coupon instruments, etc. Since they carry a guaranteed return (in the form of interest), these instruments are relatively low risk, thereby generally keeping the capital of the investor secure. It cannot be said, though, that they are entirely risk free – since a bulk of the returns comes from trading profits on such papers, an element of risk is always inherent, albeit lower than equity funds. The returns from these funds are lower compared to that of equity oriented funds, since they cannot take the advantage of market movements.

Balanced Funds: Balanced funds aim to merge the security of Debt funds with the earning capacity of equity funds, and invest in both debt papers as also equity stock in a predetermined ratio (say 60% in debt and 40% in equities). Thus, a portion of the capital is hedged against downturns in the market by investing in debt instruments, the balance being invested in equities to gain the advantage of market movements.

While each of the above funds have their own merits and demerits, the question of where to invest is best answered by the risk orientation of the investor. For a person who is looking at high returns and is not averse to risk, equity funds are the best option. For someone who is highly risk averse, Debt funds are ideally suited.

Price Determination

Now that we have a basic idea of the various types of mutual funds, we need to understand how the prices of the fund units are determined. Broadly, the income of mutual funds is derived from Interest / Dividends and Trading. While in the case of debt securities, interest income is assured, the same is not true in the case of equity stocks as the quantum of dividend depends upon the profits earned by the company concerned, aside from a whole lot of other factors. Again, while the interest income is assured in the case of debt securities, the investor need not go to a mutual fund if he can earn the same amount himself by investing in bonds / debentures. The investor puts his money in the fund in anticipation of a higher earning than ordinary debt papers would fetch him. And that is where a mutual fund is required to trade aggressively in securities. In the case of equity funds, trading is based on the Fund Manager’s perception of the risks and rewards of the stocks in his portfolio and he takes into account several factors such as the impact of the technological/ legislative changes, market competition, etc on his portfolio. In the case of Debt funds, technological changes or market competition carry lesser weightage as the interest stream is not directly linked to profitability; instead, factors such as inflation rate, political stability and the interest rate scenario are ascribed greater importance. For example, if a fund manager is holding G-Secs that carry an interest of, say six percent, and he is expecting that the next issue of G-Secs would carry an interest rate of seven percent, he would try to offload his current holding and invest the proceeds in the new issue. However, since the market in general would also be trying to offload the older G-Secs before the new issue, the laws of demand and supply would hammer the price of the six percent securities down. Whether the Fund Manager can make any gains by offloading his holding of six percent securities would depend entirely on how early he can sell. Similarly, in a falling rate regime, his gains would depend on how early he can take a buying position and/or how late he sells.

Understanding NAV

Mutual Funds declare their Net Asset Value (NAV) on a daily basis. This NAV is nothing but the difference between the total assets and the outside liabilities (such as Creditors for Expenses, Loans, etc.) of the fund at the end of each day, after adding/deducting therefrom the day’s profits/losses. The Net Asset Value is expressed per unit, dividing the total value by the total number of units outstanding. The purchase / sale price is linked to the NAV of the units.

The Investment Decision

With a huge number of mutual funds operating in the market, a thorough study of the funds is essential to make an informed investment decision. But what are the parameters on which an investment decision should be based? Well, while there is no single rule to investing, the following pointers may come in handy while making up your mind:

The Investor’s approach: The first step towards intelligent investing is to know yourself. By knowing yourself I mean understanding clearly and unambiguously the kind of profits that you intend to make and the extent of risk that you are willing to undertake. As already stated, for an aggressive investor, equity funds would be more suited. Again, if this aggressive investor were looking for short run profits and is willing to take a significant risk, he would do well to invest in sector specific funds, which might be riding the boom at that point of time. For example, in the late nineties software and other emerging technology funds were riding the dot com boom, and those investors who managed to get out before the bubble burst made fortunes, while those who stayed on suffered heavy losses.

The Pedigree: The past history of a mutual fund tells a lot about its possible future actions. To look at the dot com example again, some equity funds made steady, moderate profits and were not hit so hard when the bubble burst, while some others lost their capital as fast as they had amassed it. The reason behind different funds performing differently though investing in the same sector is primarily due to the outlook of the fund managers – if a fund manager is conservative, he would not trade as aggressively even in a sector specific fund and vice versa.

Also, the age and size of the fund play an important role in the decision process. New funds or smaller funds may post heavy gains at the beginning when their corpus and portfolio are small, but may not be able to sustain the same rate as the dis-economies of scale crop in. It is always worthwhile to adopt a wait-and-watch policy with regard to new funds unless the promoter group / fund managers are carrying a heavy baggage of reputation with them.

The Financials: Probably the most important factor in decision making vis-à-vis Mutual Fund Investment, the principal things to look into are the past trend of earnings, the effective yield on investments at NAV (and not at Face Value) if the current trend of earnings continues, the percentage of earnings that are eaten away by operating expenses, and the entry/exit loads. Each of these factors are very important; to exemplify, even a 1% difference in operating expenses could bring about a difference of nearly 10% in earnings for the investor over a 10 year period assuming an earning rate of 10%. Again, if there are any entry/exit charges, that much of the earnings is lost.

Diversification: A prudent investor would never put all his eggs in one kitty. Before investing one should always look at the extent of diversification in the portfolio. For example, if you have $10000, it would be unwise to put the entire amount in a sector specific fund. If you are an aggressive investor, you could consider parking say $ 5000 in a sector fund, and the balance could be invested in other equity based funds. A more cautious investor, on the other hand, should invest in partly in debt-oriented funds and partly in equity funds. The key is to invest in a diverse portfolio, so that even if a particular sector suddenly takes a sharp downtrend, the loss is at least partly covered by the investment in the other sectors/categories.

Monitoring: Investing in mutual funds, contrary to the common perception, is not all about letting the experts do their jobs. For one thing, experts are also liable to commit errors, and while a layman is in no position to prevent that mistake from occurring, he can at least analyze the impact the error has on his funds and on his future investment plans. And just how do you go about monitoring your investments? Well, while the periodic accounts are a help, they remain just that – a mere help. For one thing, the accounts reflect the investment pattern and the NAV only on the date of the accounts and no further – the investment pattern might change drastically over as less as a week. Under the circumstances, it is always advisable to follow the NAVs on a daily basis; the cardinal rule being ‘No one appreciates your money as much as you do’.

The above are just a few pointers towards intelligent investing; as already stated, there is no single rule of thumb to guide you along the trend curves. One needs to learn as one goes along, and in this humble investor’s opinion, investing in the intangible markets is a continuous learning exercise.

Mutual Funds for Dummies

If you're a beginner in the field of investment, then firstly, I would like to welcome you in this field. This is certainly an opening for you to save some significant portion of your hard earned money. So, if you have money and capital to invest, then you can surely think of investing in mutual funds. Mutual funds for dummies or beginners is not something that is very difficult and unattainable. In fact, one of the first mutual funds basics, that an investor has to learn is that, mutual fund is more safer option than stock and share markets. Due to diversification of your investments in mutual funds, the risk factor decreases significantly, although it's not negligible. Understanding mutual funds for dummies requires them to exactly know what are mutual funds.

Investing in Mutual Funds for Dummies

Wondering how to invest in mutual funds? Mutual funds are a simple investment option in which a pool of money is created from several investors and then based on total money collected, various investments are diversified in securities options. The profits obtained from these investments are shared among all investors depending on their contribution. This article is a basic guide for mutual fund investing for the layman. Mutual funds for beginners is more about understanding the basics of this investment option as, all they have to do is to invest the money and rest other things are taken care by a group of professionals who are expert in trading and investing. So, if you are looking of some significant differences between mutual funds vs stocks, this is the most important one and is also an advantage of mutual funds. Unlike stock broking where you have to keep an eye on the market prices of your stocks, mutual funds give you the flexibility to invest your capital once and then leave rest in hands of mutual fund firm (where you've invested the money to attain profits). Knowing how to invest in mutual funds demands a detailed study, so, here I enlist an abridged information on steps of mutual fund investing. This will serve as a simple piece of information to mutual funds for dummies.

    * Through various media, you'll be able to know about advertisements of mutual fund investments in several mutual fund firms. Contact any of them after doing some research about their schemes and plans. Take advise of your friends and acquaintances who're already into mutual fund investment.
    * Buy the mutual fund shares of the chosen company. Assign a budget to purchase shares.
    * The money from several contributors/shareholders is pooled in and a capital for investment is created.
    * The money that has been collected is invested into diverse fields like stock markets, future markets, forex market, automobile sector, etc. Your mutual firm's fund manager is the one who decides where all the capital collected has to be invested.
    * The mutual fund managers keep you informed about all proceedings and profits and you are paid dividends by profits that have been made on collective investment of all shareholders.

This was just a brief piece of information on mutual funds for dummies. Beginners who are interested in investing in mutual funds must equip themselves with mutual fund investment advice, so that they can start off on a better note. While understanding the intricacies of mutual funds in the beginning may not be easy for everyone, checking mutual fund ratings is a great tool to get an idea about what is the rating of the firm. Moreover, checking about the firm where you are investing your money and its past history and success can help you to take a wise decision.

How do Mutual Funds Work

Mutual funds are popular and safer investment options, than stock or futures investment. They too come with their share of risk but it is a lot lesser in comparison to other options. The lowering of risk is attributed to the fact that mutual funds invest your money by following the diversification principle of not placing all your eggs in the same basket. They choose only the best and safest baskets for your eggs to grow and hatch eventually. That is, they distribute and invest money in such a way that it has multiple opportunities to grow! So if you are looking for steady growth of your investments, learn how to invest in mutual funds.

People out there, who want to be rich overnight should go for the stock market or the futures trading. Mutual funds are well suited for people who want to have a long term investment and see their wealth growing steadily. In this article, your curiosity about how do mutual funds work will be satiated. You will also know the various investment options that come under the umbrella of mutual funds.

What is a Mutual Fund?

A mutual fund is a collective investment fund, wherein, individual contributions of all investors are pooled in, to invest in diversified securities options and profits from proceeds are shared among them. This is roughly how mutual funds work. In United States of America, mutual fund as an idea and investment tool began operating since 1924. There are many types of mutual funds and one needs to know the terminologies and intricacies of mutual fund investment before going ahead with them. This article is like a guide to mutual fund investing for the layman. Let us go into more details.

How Do Mutual Funds Work for Investors?

Here is a step by step analysis of how do mutual funds work for investors and how they are operated.

Step 1: You Buy Mutual Fund Shares
The mutual fund companies advertise their investment schemes and issue shares of their investment plans, along with information on expected growth rate. You can buy these shares directly from the mutual fund company or through brokers.

Step 2: Money is Pooled in
The money contributions of all shareholders like you are pooled in to create a capital for investment.

Step 3: Money is Invested in Different Types of Securities
The total money pool is used by the mutual fund managers to invest in diverse kinds of securities. These securities may be in stock market, futures market, the forex market or even be investments in infrastructure.

There is a fund manager who decides in which areas your investments are made and who has to look after your investment. You have no say whatsoever in the investment decisions. You are only entitled to returns on your investment. The income or commission of the fund manager is dependent on profits from investment. So you have to think and invest wisely in what kind of mutual fund you want to invest in, as once the money is invested and placed in hands of the fund manager, you have no control. So there is a risk in mutual fund investment, but much lesser due to investment diversification.

Step 4: You are Paid Profit Dividends Periodically
The mutual fund manager periodically gives you a report of its proceeds and performance. You are paid dividends periodically, depending on profits mutual funds make on collective investment. The costs involved in operating of funds including marketing, distribution, investment advisory services and other costs are also transferred to the investor. That is, the returns or dividends you get are after these costs have been subtracted. All these charges and costs like managements fees, non management expenses, service fees, and brokerage commissions are categorically called load charges. There are many advantages and disadvantages of mutual funds investment, which you should weigh out before investing.

What are the different types of mutual funds? There are many types of mutual funds based on the type of securities, they invest money in and the kind of restrictions they have on share transactions. While investing in a mutual fund, check the past history and performance of company in detail. Look at the growth versus value ratio that they are offering and the mutual funds ratings. All these details are supplied in the prospectus offered by mutual funds. Learn to read the fine print in detail to avoid repentance later. Check the fee table and future projected returns. Get some mutual fund investment advice, before you go ahead.

Top Performing Mutual Funds

Mutual fund long term investments have always given decent returns to the investors. Before knowing about the top performing mutual funds 10 years or the top performing mutual funds 5 years, any investor should first understand the concept of mutual funds clearly. This can help the investors in choosing the right fund from so many mutual fund schemes available in the market. Before we know about the names of the top performing mutual funds, let us first acquaint ourselves with how to invest in mutual funds in the next section.

Mutual Fund Investments

The concept of mutual funds originated many years ago and since then these funds have gained a lot of popularity among the investors. Mutual funds were among the very few investment options that could save investors from stock market crashes. Mutual funds can be the best investments for people not knowing too much about the stock markets. So, instead of directly risking your money, you can invest in the market through mutual fund companies. Every mutual fund company has its team of researchers, financial analysts, fund managers and experts of the capital markets. The research is very thorough and strong and hence the chances of getting great profits increase. Retail investors have much less sources and knowledge of the happenings in the stock market and hence they can get carried away by wrong advice from people. The mutual fund ratings help people to distinguish the performing funds from the non performing ones.

In the mutual fund investments, investors get the options of choosing from funds such as high risk high return fund, medium risk medium return fund, low risk low return fund. Once you approach the mutual fund company, they will be able to explain to you the various schemes and help you to find out which one would be the best for you considering your age, investment time horizon, risk taking ability and other things. Your money will ultimately get invested in the capital markets in some of the finest companies promising good returns in the days to come. There are many mutual funds which offer the option of investing every month as per your convenience which are generally known as the systematic investment plans. This would be the best choice for people who do not have a huge amount to invest in a bulk.

Short term mutual fund investments are subject to stock market risks and volatility. So, investors are generally advised to look at mutual funds a s a long term investment. What technique is used by the mutual funds these days is that a diversified investment is done for clients to minimize the risk and maximize the profits. All sectors of the economy do not perform well all the time and hence investing in companies belonging to diverse sectors would be profitable for retail investors. Now that we have understood the ways of identifying top performing mutual funds, let us know which are the most preferred mutual funds these days.

Most Popular Mutual Funds

Given below are the names of the top performing mutual funds for your reference:

    * American Funds Capital Income Builder
    * Vanguard Wellington
    * Templeton Global Bond advantage
    * Dreyfus International Bond
    * Fidelity Contrafund

When you search for the top performing mutual funds, you should look at consistency of return and fair practices along with the reputation of the mutual fund company. These companies will be charging you for the quality service which they provide you and hence you also need to be aware of these charges by consulting industry insiders. You need to educate yourself regarding the advantages and disadvantages of mutual funds for proper investing. Good luck for your investments and do well!

High Yield Mutual Funds

Investment in mutual funds has seen a rising trend over the years as many people have suffered big losses by direct stock investing. Mutual fund companies will invest your wealth into the stock market in a very organized and systematic manner, thus yielding high returns on investment. Many multi-national financial service firms are offering high dividend yield mutual funds and this concept in general has been quite acceptable in the last few years. These mutual funds have given good returns despite severe volatility in stock markets across the world. In the next section, let us talk about the high yield mutual funds which can be the best mutual funds for dummies.

Advantages of High Yield Mutual Fund Investments

There are many people who wish to know how to invest in mutual funds and what are the benefits of such investments. The best part of mutual fund investments is the reduced risk associated with them. You get returns at par with direct stock investments and also get attractive dividends if your plan has provision for the same. The mutual funds are manged by experienced fund managers who have a vast experience in the capital markets. So, as per the situation of the market, these fund managers can adjust your portfolio and include stocks which are capable of generating high returns. If mutual fund investments are done for a longer term basis, you can get exceptional returns, far more than what you can get by just keeping your money in the bank. High yield mutual funds are available in different forms. There are many companies which are offering more than one mutual fund options. You have the high risk high return, low risk low return or the medium risk, medium return kind of mutual funds. Even though the name of the fund is low risk low return, the kind of money you earn is quite substantial. Now, having got the high yield mutual funds, let us know how to choose an appropriate high risk mutual fund in the next paragraph.

Choosing the Right Mutual Fund

There are some basic steps which you need to follow while you select a suitable high risk mutual fund. First of all, you need to go to the office of the mutual fund company and meet up with the managers. You need to discuss with them their different offerings as far as mutual funds re concerned. The manager will explain to you the advantages of every fund. At this point, you should clearly tell him your risk taking ability and how much amount you are wiling to invest every year or month. After this, you need to shortlist a few funds. Finally, you should choose that fund which has a good reputation in the market and has given consistent returns to investors over a period of time. Many financial advisers will advice yo to stay away from new funds till they prove their ability to generate superior returns. The mutual funds vs stocks comparison will help you know things better. Mutual fund ratings by rating agencies make choosing the best one easier.

While investing in high yield mutual funds, you should remember that these funds are affected by market risks. At a particular point, it may happen that you are getting negative returns for your investments. However, as the markets come back in shape, you will notice a rise in wealth of your total portfolio. You can seek mutual fund investment advice from reputed personnel in the industry.

Some Popular High Yield Fund Choices

Given below are some popular high yield fund choices widely recommended by experts:

    * UBS PACE High Yield P
    * ING Pioneer High Yield I
    * Rydex High Yield Strategy A
    * Aegis High Yield
    * Principal High Yield A

This content on high yield mutual funds will certainly help you to choose one easily. Mutual funds are a component of financial planning and financial management and are recommended widely to investors. So, invest in them to secure your financial future. Good luck!

Exchange Traded Funds vs Mutual Funds

Investing in funds has helped many people get decent annual returns over the years. The concepts of exchange traded funds and mutual funds are easy to understand. At the same time, one must be aware of the difference between exchange traded funds and mutual funds so that you can decide which investment would be more advantageous for you. The content on exchange traded funds vs mutual funds will give you the solution for all your queries regarding fund investments.

Concept of Exchange Traded Funds

In the mutual funds vs exchange traded fund comparison, let us first get acquainted with exchange traded funds. These are nothing but the index mutual funds with some special features and characteristics. In the ETF's, an index is tracked and their aim is to generate consistent returns for the investors. The ETF's are bought and sold constantly and hence they will naturally experience a lot of fluctuations in their prices. The main reason why ETF's have been recommended is that they help us diversify our investment like an index fund. What advantage the ETF's have over the mutual funds include the tax benefits. We must be well aware that taxes incurred on ETF's are lower than that on the mutual funds. The cost effective nature and flexibility provided by ETF investments have made them a popular choice over the years. Index ETF's, bond ETF's and commodity ETF's are the main types of ETF's available for investors. Though there are some points which are better about ETF's than mutual funds in the ETF vs mutual funds comparison, mutual fund systematic investments have always helped generate superior returns over a longer period of time. So, let us get to know more about them in the next section of exchange traded funds vs mutual funds.

Concept of Mutual Funds

Mutual funds are being offered by financial services firms across the world. They are a safer bet for investors wary of the stock markets and direct stock investing. Mutual funds can average out your risk by investing in different sectors of the economy. When you approach the mutual fund service providers, you will be explained the nature of various schemes floated by the company in the market. You will be explained the role of fund managers and the how the returns are maximized with accurate decisions. By considering the mutual fund ratings and reviews, you can take a final call on your mutual fund investments.

Mutual funds are systematic financial products which are of three types - high risk high return ones, medium risk medium return ones and the low risk low return ones. You can choose any product as per your risk taking ability. To start with, retail investors can go with low risk funds and then switch over to the other fund as they become more confident about their investments. The mutual funds will be investing your money in stocks of performing companies. Predicting the company future performance is slightly tough considering the constantly changing business environments. However, this risk is reduced as the fund managers have the right to exit a particular company stock and invest in out performers to keep up with the promise of returns to investors. Mutual fund companies will charge you for their services and you can expect a much better performance from them in times of market boom fueled by strong economic growth. ETF vs index fund will give you more information.

This exchange traded funds vs mutual funds comparison must have helped you know about both these types. You can opt for any investment type by conducting a detailed research and consulting your investment advisers. All the best and happy investing!

Investment Funds for Children

Investing wisely for children has become very important these days to make sure that they do not fall short of money when they grow up. Investments do not give overnight returns and hence child investments have to be strictly of the long term nature. There are many parents who wish to know how to invest in mutual funds for children. Though there are many financial advisers in the market, the information on investment funds for children given below will guide you well.

Mutual Fund Investments for Children

Mutual fund investments for children can be useful if you can select the right kind of fund. Among the mutual funds, you get a wide range of options from different companies. You have the mid cap funds, large cap funds and also the small cap funds. Since investment funds for children should give guaranteed returns, you will be advised to stay away from the exclusive small cap funds as these funds basically invest in small cap stocks that are pretty volatile in nature. A mutual fund systematically investing in mid and large cap stocks would be beneficial for child investment. These are the funds which will diversify your investments in various sectors of the economy and not lay a lot of emphasis on any one sector.

Investment funds for children can also consist of sector funds in which emphasis is given on one particular sector. This is done by considering the growth potential of the sector and recent as well as past performance. Considering the performance of the mutual fund companies with the help of mutual fund ratings is absolutely essential before you make any investments for children. You should not invest your money in funds that have just started out or are not backed by established financial services' firms. The returns given by funds over the years must be analyzed and their performance during turbulent economic conditions should also be judged. Investment funds for children can also be in the form of savings schemes in which you deposit your money for several years and get better returns than the normal deposits. After having known about the investment funds for children, let us now know some other investment options for children.

Some More Investment Options for Children

Real Estate
Real estate investments have given good returns on an annual basis to investors over the years. By buying some good real estate in the form of residential or commercial properties, you can create a safe haven for your child in the future. The appreciation in the property prices will definitely make him cash rich. This is surely one of the finest long term investments for children.

Stock Market Investments
Stock market investments are risky and stock investing should be done only in a select company stocks. For this, you need careful stock research and good guidance from a good financial adviser. Generally, large cap stocks would be better options for child investments.

Gold
This is one of the best investments according to many experts. Gold investments for children would be much safer and reliable than most other investments. By selling gold at high prices and buying again at lower price, you will be able to create large wealth for your child. The facility to hold gold in electronic form has made things simpler. For more articles on investments, refer to:

    * Best Ways To Invest Money
    * Best Long Term Investments

With many investment funds for children being launched, you need to carefully analyze all funds and take a decision regarding your investments. Do not be in a hurry to invest your money and do so only when you are fully convinced about the offer from the company. I would like to sign off here by wishing you all the best for your investments. Good luck!

Mutual Funds to Invest In

The mutual fund industry is performing exceedingly well these days, and according to experts, the good performance is expected to continue in the years to come. Many popular mutual funds have delivered good results, thus increasing the faith of investors in them. Knowing the mutual funds to invest in, or the ways of selecting a mutual fund for investment, is very essential for all retail investors. The next few paragraphs will help you know the steps involved in choosing a mutual fund.

Picking the Right Mutual Funds

Mutual funds are definitely a profitable investment if done in the right manner. These funds are offered by financial services firms in different firms and types. The first category is that of the large cap fund which will actually invest your money in stocks of front line companies. Here, the risk associated would be minimum as these companies are more stable and better performers financially. You should give preference to the diversified funds for smart investments as you can minimize your risk with the help of such investments. The mid cap and small cap mutual funds are meant for more aggressive investors who are ready to take more risks.

While considering the mutual funds to invest in, you also need to take into account the time horizon for the investments. Mutual funds are long term investment options that can give phenomenal returns if you have patience. These may not give you the expected results in a very short term period. When we think of the mutual funds to invest in, we also need to talk about the role of fund managers. Fund mangers of the company which you choose will be managing your wealth and investing it into stocks, bonds, etc., as per the situation prevalent in the market. The knowledge and expertise of the fund managers plays a big role in making profits for investors.

Mutual fund ratings make it very easy for investors to invest in the right fund. These ratings are given on the basis of previous performance and hence you can easily distinguish the out performing funds from the under performers. Now, having known how to choose the mutual funds to invest in, let us see the comparison between mutual funds and direct stock market investments in the next section.

Mutual Fund Investment vs Direct Stock Investments

Mutual funds are a more defensive and safer investment option than direct stock market investments. In fact, direct stock investments are meant for expert investors and traders who know what actions to take and different times in the market. Most mutual fund investors would get the benefit of not having to track the markets on a daily basis by investing in mutual funds. Also, in times of economic recession or economic slowdown, wealth can be more protected in mutual funds rather than in direct stock investments. That is why, most investment advisers suggest the way of mutual funds as a better investment option for new and conservative investors for better and safer returns.

For more articles on mutual funds, refer to:

    * How to Invest in Mutual Funds
    * Mutual Funds for Dummies
    * Mutual Funds Investment Advice

The above information on mutual funds to invest in will prove to be fruitful for your investments. However, at this point, you should remember that you would be solely responsible for profit or loss incurred on your investments and hence being extremely careful before investing your money is necessary. Good luck and earn well!

Good Mutual Funds

Mutual funds are surely a brilliant way to invest and make profits in the long term. There are many high yield mutual funds that can be deemed as safe investment bets and have been highly recommended by investment advisers. Ideally, mutual fund investments provide great returns in the long term. So, you should have an investment time horizon of at least five years to reap maximum benefits. In the next section, we shall try and understand how to identify good mutual funds.

Identifying Good Mutual Funds

Though mutual funds provide great returns, there are many funds in the market and it becomes necessary to identify the best ones and invest only in them. Choosing a wrong mutual fund can be disastrous and can create problems for you in achieving your financial goals. The mutual fund ratings can help you to know of funds which are really profitable for retail investors.

Past performance and investor satisfaction with a particular fund are very important factors to consider before opting for one. Mutual fund companies offer you the option of investing in a large cap fund or a mid cap and small cap fund. While the large cap funds aim at providing good returns by sectoral out performance, the mid cap funds can provide much more returns if handled in a professional manner by the fund managers. Investors can choose among these funds by taking into consideration their risk taking ability and personal choices. There are sectoral funds in the market which target a particular booming sector of the economy and make investments in the top stocks of those sectors. There are also fully diversified mutual funds which make investments in different sectors and eye companies posting good financial results and showing signs of continuous annual growth and steady margins. Good mutual funds are a way of avoiding the risk of direct stock investments which can erode your wealth considerably if wrong buying is done. The mutual funds vs stocks comparison given below will help you know the advantages of mutual funds.

Mutual Fund vs Stocks Comparison

While direct stock market investments are known to give astonishingly high returns, mutual fund returns are more stable and sure. This is because mutual funds are well managed by fund managers who are qualified and experienced finance professionals. The investments are therefore handled in a better way as the professionals have more knowledge of markets than individuals. Mutual fund investment advice will give you relevant information.

Though most good mutual funds have given good returns to investors even in the time of economic crisis, one needs to understand that there is always a small risk with funds as with any other investments. The list of top funds given below will help you along with the explanation on how to invest in mutual funds.

Best Fund Options for Investors

Here are good fund investment options for investors:

    * UBS PACE High Yield P
    * Principal High Yield A
    * Aegis High Yield
    * Rydex High Yield Strategy A
    * ING Pioneer High Yield I

Apart from these mutual funds, you can look for some more high yield options and the funds offered by internationally recognized financial services firms.

In this Buzzle article on good mutual funds, we have discussed the ways of investing in funds and earning great returns. A good fund can give anything between fifteen to twenty-five percent annual return to investors. So, think over it and take the right decision, Good luck!

Low Risk Mutual Funds

Mutual fund investments can give great returns if the investor has a longer time horizon for his investments and invests in the right fund. Though you get to know about the top low risk mutual funds through many sources such as business magazines, investment advisers and the Internet, you need to study the investment documents of mutual funds carefully to know whether the fund suits you and if it will fulfill your return requirements. Before we know of the low risk mutual funds or the top performing mutual funds available in the market, let us first know the basics of mutual fund investing in the next section.

Basics of Mutual Fund Investing

Mutual funds can be classified as high risk high return, low risk low return, and medium risk medium return ones. Though many investors are interested in the high yield mutual funds, the risk taking capacity of every investor is not the same. So, investors not wishing to risk their money can go for the low risk mutual funds which may give a lesser return than the high risk ones, but will still help you make more returns than normal savings. Diversified mutual funds which invest your wealth in a planned manner in stocks of different upcoming and out performing sectors can be the ideal choice for defensive investors. The return achieved from diversified mutual funds is always better than the normal funds due to the extremely professional way of handling investments of clients.

Before you invest your money in a mutual fund, you should be fully aware of the products of all mutual fund companies. You need to compare their performance over the years and find out which fund has surpassed investor expectations consistently. Investing in such a well managed fund would naturally be the right choice for investors. A mutual fund should be such that it does not risk your money like direct stock market investments and yet gives anything between twelve to twenty five percent of annual return on your investments.

The role of the fund managers is extremely important in determining the success of a mutual fund. The return the investors will get will directly depends on the expertize of the fund managers in handling difficult situations, especially when the market moves down and starts giving negative returns to the investors. Mutual fund mangers also need to track global markets to explore un-discovered investment opportunities. There are many financial institutions who offer mutual fund schemes for retail investors. By consulting your investment adviser, you can jump into the world of investing and comfortably emerge as a successful and money making investor. Now, having known of the low risk mutual funds, let us know which are the best mutual funds for 2011 in the next section.

Top Performing Mutual Funds

Here are the top performing mutual funds for this year:

    * American Funds Capital Income Builder
    * Templeton Global Bond advantage
    * Vanguard Wellington
    * Dreyfus International Bond
    * Fidelity Contrafund

To read more Buzzle articles on mutual funds, you can refer to:

    * Mutual Funds for Dummies
    * No Load Mutual Funds
    * Index Funds Vs Mutual Funds

This article on low risk mutual funds and top performing funds will help you to choose the right mutual fund for yourself. Take the right decision and see your wealth grow rapidly. All the best!

Mutual Funds or Stocks?

Making the right kind of investments has become more and more necessary these days. Mutual funds and stock direct investments have been the most popular forms of investing for a long period. The consistent returns given by these forms of investments have increased the faith of people in them. Stocks or mutual funds can give phenomenal returns to investors in the longer term. After reading the explanation on mutual funds or stocks below, you will get to know which is better mutual fund or stocks, easily.

Stock Investments vs Mutual Fund Investments

In the mutual funds vs stocks comparison, knowing about the advantages and disadvantages of both forms of investing is essential. First, let us discuss about the direct stock investments. Stock market investments can be of two types - long term investments or short term investments. Long term investments in blue chip stocks can pay off really well and can generate superior returns than any kind of mutual funds. By doing such type of investment, you also get the advantage of dividends declared by companies. Dividends are nothing but the distribution of profits among the shareholders by the company. You can also benefit from the allotment of bonus shares which will obviously increase your percentage holding in the company. There are many people who have made millions by holding on to quality stocks such as Microsoft over a number of years. High profitability makes the mutual funds or stocks comparison more in favor of direct stock investments.

However, the risks associated with stock investing is much more as compared to that with the mutual funds. Trading in volatile stocks has made many investors suffer huge losses. This is because of the less liquidity and speculative nature of risky stocks. The problem arises when investors get trapped at higher levels and are unable to sell off their stakes due to the lack of buyers. To benefit from the high yield stocks 2011, one should have a thorough stock research and good technical analysis skills. Though stock predictions from experts can really be useful, self study is crucial for success.

While choosing among mutual funds or stocks for investment, you need to take into consideration your risk taking ability. Mutual funds for dummies can mean consistent returns over the years in the range of fifteen to twenty five percent provided they invest in the right kind of fund. Most experts in the mutual fund industry will suggest you to invest in diversified funds to minimize your overall risk. A diversified fund will invest your money in different investment instruments, thus beating uncertainties in the market. There are plenty of high yield mutual funds and the chances of losing your money here are relatively less as compared to stocks. Top performing mutual funds will give you more relevant information.

When you make stock investments on your own, you might not be aware completely of the market conditions and may end up taking the wrong decision at the wrong time. In case of mutual funds, they are professionally managed by fund managers who have high level of expertize as well as experience in the capital markets. These are highly educated professionals from major business schools and hence you can rely on those who have given consistent results in the past. By now, you must have got the right answer for your question - which is better mutual fund or stocks. The following Buzzle articles will help you take the right investment decisions:

Growth Mutual Funds

Who does not like a good chocolate cake? A larger cake is always better than a smaller one. What are the pros and cons. The pros-better satisfaction of your taste buds and nice HDL cholesterol for your heart. The cons, costly, difficult to carry and can give you a sugar rush. The same analogy can be applied for growth mutual funds. Simply put, growth mutual funds invest your money into fast growing companies (bigger cake) till the company grows and gives you better returns, then the focus of investment shifts to different companies which offer even better growth and profits. The growth mutual funds are like huge chocolate cakes and if you look at the situation, you may also notice that the growth mutual funds have same pros and cons like a large chocolate cake. Here's an explanation to the concept of growth mutual funds. So here goes…

About Mutual Funds and their Working

Stocks and bonds are common smaller investment options where the investor has to actually dedicate a significant time for the investment. The mutual fund on the other hand is an investment where the investments of several people are put together in a pot and invested in analyzed destinations. Know how interest accrues on the bank accounts or how high insurance covers are provided to the people in question? Simple, company, bank or financial institute appoints a fund manager who is a genius in the world of finance, mathematics and economics. The fund manager, with the help of a well trained team invests all the money into highly secured avenues, this can include anything, stocks, gold, silver and even land. The proceeds are then partially taken by the fund provider and the remainder is given to us as coverage, returns or interest. When it comes to mutual funds, equity (stock or capital), bonds and money markets are three common destinations. In some cases the amount of profit is disclosed and set as a target by the mutual fund institute. It must be noted that the investment for mutual funds can be done in one single shot or in installments. Within the installments also you may have fixed and variable installments.

As a result of this specific mechanism, a common trend has evolved in the economy. Several times companies or destinations in which the fund manager invests, approach the manager for capital (this is not legal, in some cases and in some nations), with a proposal and need for capital. The manger then underwrites the company and provides a capital if the company is reliable enough.

Growth Mutual Funds

The growth mutual funds are just like any ordinary mutual funds, and have the same mechanism. The growth mutual funds, have one unique specialty, these funds are invested into a fast growing stocks and equities. When the company in which the growth fund is being invested shows a down graph, the focus immediately shifts. Some really aggressive growth mutual funds change investment destinations in a few seconds time to focus on better and better stocks. Now, when you get a growth mutual fund, the company projects two figures, one, the minimum return amount that you will get and is promised by the company to you (legally enforceable). This amount is your principle investment plus some yield/returns. The other figure is not a promise but is merely a prediction. The company shares the amount of returns with you on a periodic basis. This sum varies and largely depends on the economy and the funds performance, again it is just a projection, not a promise. In some cases, you can also ask the company to reinvest this return instead to taking it. These funds are thus basically high yield mutual funds, with a proportionality high risk.

There are some growth funds where you can also recommend or choose the sector and even amount for investment. In very simple words a growth fund is an indirect equity or stock investment that is done for you by a professional. Some of the best growth mutual funds include the following:

    * Rydex Dynamic NASDAQ-100 2X Strategy H
    * Dynamic US Growth I
    * Geneva Advisors All Cap Growth Instl
    * Genworth VIT Calamos Growth Inst
    * Rydex Dynamic NASDAQ-100 2X Strategy A

Some other bank and financial institute operated growth funds, include:

    * Wells Fargo Advantage Growth Balanced
    * J Hancock Balanced A
    * State Farm Balanced
    * Alpine Dynamic Balance
    * Thrivent Balanced A

So let's take a shot at the pros and cons of growth mutual funds. Fairly put, the pros are that you get good returns without doing much work. The income is really good, shooting out over more than 10% to 15%. The second advantage is that your interest in the fund can be sold to some other person if you feel the need for immediate money/liquidity. The growth mutual funds risks are obvious, market is unpredictable, hence you have to keep your fingers crossed for success. The amount that you get as a return (the non-promised or projected part), may also go down to a zero (touch wood) and in contrast, the sky is the limit for the returns. The second drawback is that the high level of investment is to be done in a one-time lump sum for most of the mutual funds. In some cases you might also opt for a installed fund. However, it is fixed and high. For more inputs on mutual funds you may also refer to the following resources:

    * Mutual Funds Ratings
    * Mutual Funds vs Stocks

The growth mutual funds are quite a good investment. The only drawback that can be connoted is that you need really good market conditions, a developing economy and hefty initial investment to make hay. I hope that the elaboration on growth mutual funds is resourceful.

Best Money Market Funds

You may not have heard of some of the best money market funds due to the simple fact that this kind of fund is among the really, really old funds for investments. In fact it is often connoted to be the grandfather of all investments, its probably even older than most of the stock exchanges. In the following paragraphs. Have a look…

About Money Market Funds

As mentioned above the concept of money market and money market funds is historic and older than some of the biggest stock exchanges and stock based funds. Most of the economies in the world operate on two types of markets, namely, the stock market and the money market. The stock market as all of us know helps us to invest in securities of companies. In contrast, the money market is a set of short term debts (term less than 12-13 months), such as IOU instruments, bills, bonds and debts that have short term maturity. In some cases, some types of loans and mortgages are also included in such markets. Another differentiating factor of the money market is that it does not have an exchange or specified market. The transaction is carried out on inter-personal basis. Some common instruments which encompass the spectrum of the money market include, bankers' acceptances, Certificate of deposit, Repurchase agreements, Commercial paper, Eurodollar deposit, Money funds, Short-lived mortgage, Treasury bills, Municipal notes, Federal funds, etc.

A money market fund, is basically a mutual fund that invests into a money market and instruments of the money market. When you invest into a money market, the fund manager pools together the share or interest of thousands of people into one big pool and then invests the entire or partial pool into a well performing, secured and insured set of money market instruments, which are bought and sold for profit or are simply bought in and retained till maturity. The secureness of the instrument, make the money market fund the safest fund with conservative return on investment. These funds are rarely affected by economic phenomenons such as inflation, deflation and economic recession.

The United States Securities and Exchange Commission's (SEC) Investment Company Act of 1940 is the governing act for the money market funds. The principle definition also consists of core features of such funds:

    * The contributions and investments into the funds would be connoted to be 'shares' of the fund.
    * The fund and fund manager would invest the fund resources in the highest rating (safe yet high yielding) debts, investments, instruments, securities and bonds.
    * The maturity of the debts, investments, instruments, securities and bonds shall be below 13 months, that is short term.
    * The fund must have a weighted average maturity (WAM) of 60 days or less and more than 5%, of the fund cannot be invested into the same source except government based securities.
    * The fund is to maintain an exact $1 Net Asset Value (NAV), i.e. asset minus liability, at any given point of time.

These characteristics make the money market funds very safe yet conservative on returns. In some cases a very similar investment channel known as the money market accounts, which operates in the very same manner is also used. The big advantage is that you do not have to make any specific amount of investment in this account, though there is an upper and lower limit. The money market fund in contrast has a specified lump sum or fixed investment installment policy for its every possible 'share'. For more inputs you may also refer to 'how does a money market account work'.

Note: when any money market fund's Net Asset Value (NAV) comes down blow, $1, the fund has said to have "broke the buck". Such an incident is so rare that it has happened only thrice in the 37 year long history of money market funds. Talk about stability! This thing's as stable as land prices in a desert!

Best Money Market Funds

Though the best money market funds are conservative on returns, there are several parameters with the help of which a fund can be judged. The most common is its performance. The return rates and size of the fund also matter significantly due to fact that larger the pool, greater is the fund's power in the market, and there by better is the return rate. Thus the best money market mutual funds, do have huge sizes and magnificent performance. By the virtue of size, stability and reputation, the following are some mammoth funds:

    * JPMorgan Prime Money Market Fund
    * BlackRock Funds
    * Western Asset Funds
    * Federated Funds
    * Bank of America Funds
    * Dreyfus Funds
    * AIM Funds
    * Evergreen Fund
    * Fidelity Investments' Cash Reserves
    * Fidelity, Vanguard
    * Schwab

Here are some of the best performing money market funds, that have ruled the market of recent:

    * Vanguard US Treasury Money Market Fund
    * Russell Money Market Fund
    * Payden & Rygel Cash Reserves Money Market Fund
    * Federated California Municipal Cash Trust Institutional Fund
    * Alpine Municipal Money Market Fund
    * Fidelity New Jersey AMT Tax Free Money Market Fund
    * Ambassador Money Market Fund Institutional
    * Gabelli US Treasury Money Market Fund
    * Fidelity Select Money Market Portfolio
    * Dreyfuss Money Market
    * Marshall Tax Free Money Market Fund
    * PayPal MMF

The aforementioned are among the best investments in the money market funds. There are several more classifications for such funds, such as Retail money fund and, Institutional money fund. There are several others such funds that invest only in corporate instruments, or the ones that invest only in government securities. As mentioned above the best money market funds are cheap to enter and invest in, safe and stable. However, they tend to provide a low and a very constant and conservative rate of return. I hope, that the elaboration on the best money market funds is resourceful.

Best Mutual Funds to Invest in 2011

Mutual fund investments have been a popular choice of many investors for several years now. The safety and high chances of getting better returns is what attracts people to this form of investment. Choosing of the best mutual funds to invest in 2011 can be done by considering some main parameters and by doing so, you can prevent yourself from putting your money in the wrong fund. The information in the next section will help you understand what are the best mutual funds to invest in 2011.

Choosing Mutual Funds in 2011

The good mutual funds to invest in this year would be the ones in which sector diversification has been given special importance. There are many mutual funds available where the concentration is just on stocks of a particular sector of the economy. This would not be the best investments for 2011 considering that the performance of any sector can go down due to demand fluctuations. In such cases, investors in such non diversified funds may get negative returns for a year or two which reduces the total return they would get after the specific time of investment.

This clearly implies that the good investments for 2011 would be in funds having exposure to different sectors. Though mutual funds can be the best long term investments, you need to take into consideration which are the top performing mutual funds on the basis of the mutual fund ratings. Past performance study becomes important in the case of mutual funds because all of them cannot guarantee you a healthy return of twenty-five to thirty percent per year. The high yield mutual funds would be those which are managed by efficient fund managers. The fund mangers should be able to make changes in the holdings of their mutual fund as per the changing situation in the economy. They have to consider the earnings of corporates and calculate their target prices and make accurate decisions to make profits for their customers.

Now, the main question before most people would be-which mutual fund to invest in. Here, people get a variety of choices such as high risk mid cap and small cap funds or the relatively low risk large cap funds. For those investors looking for low risks and sure returns, the large cap funds, which basically invest in companies having more market capitalization and those having very strong cash flows and business model would be the preferred choice. Having said this, some small cap and mid cap funds can be the best mutual funds for 2011 as it has been a truth that stocks of small companies have displayed much faster and aggressive moves than those of large firms. Now, having known how to invest in mutual funds, let us know of the best mutual funds to buy now in the succeeding section.

Ideal Mutual Funds for Investors

Given below are some of the best mutual funds to invest in 2011. Though these funds have received a good response, you should also consult your investment advisor before plunging into them. The mutual funds for dummies are:

    * Rydex High Yield Strategy A
    * ING Pioneer High Yield I
    * UBS PACE High Yield P
    * Aegis High Yield
    * Principal High Yield A
    * DSPBR Balanced

For more Buzzle articles on investments, you can refer to:

    * Best Investments for Young People
    * No Load Mutual Funds
    * Best Way to Invest in Gold
    * Short Term Investment Options

This article on best mutual funds to invest in 2011 will be useful for you to plan your investments in an organized manner. Smart mutual fund investments can assist in the process of wealth creation to a great extent. So, think over this investment option seriously and take the right decision. All the best!

Best Fidelity Funds for 2011

Before we discuss some of the best Fidelity funds for 2011, let us get to know more about the concepts relating to best Fidelity funds. These funds are basically provided by a privately owned company known as Fidelity Investments. The popularity and the number of funds provided by this investment firm is such that 'Fidelity funds' has become a household brand and industry in itself. There are about 500 different funds in operation with an investment of more than 20 million investors. Officially known as the FMR LLC, Fidelity Investments servers customers in North America. Fidelity International Limited (FIL), also known as Fidelity Investment Managers, is the international operations branch of the company. The company's founding family, the Johnson family, still holds the majority share in working of the business. The current key people include Edward "Ned" C. Johnson 3rd and his daughter Abigail Johnson, who is the 22nd wealthiest person in the world.

About Top Fidelity Funds

The term 'Fidelity funds' refers to the huge family of investment funds which are provided by Fidelity investments. The types of investments and funds which are provided by Fidelity investments are largely versatile and operate in an enormous spectrum.

Almost all the top Fidelity funds for 2011, operate in the same manner which is congruent to the mechanism of most mutual funds. A fund is principally a large pool of money which is contributed by several people, by purchasing, what is known as a 'share' of the fund. In some cases the entry into the fund is direct, that is without the purchase of the share. The investment per share is substantial and can be a one time investment, or it can also be an installment investment. The pool of funds is managed by fund managers who have a market hardened experience. The managers invest the amount paid by investors into several different well underwritten sources which then have a high yield. These yields are then divided into several parts and are distributed by the company within the investors and also within several of its employees. Some of the common investment funds which are provided by Fidelity include, the following. It must be noted that the class or name of the find in itself depicts some of the most important features of the find itself. Have a look:

    * Fidelity Stock Funds: A really good investment for 2011 is the Fidelity stock funds. The investment of these funds principally concentrates on the common stock and equity of companies and business capital. There are further classifications of the Fidelity stock funds, depending upon the risk and return over investment that is gained through this fund.
    * General Mutual Funds: The top Fidelity mutual funds are also among the top performing mutual funds. A mutual fund is a fund where the amounts are invested into several different sectors and it also enters markets other than the stock market. The best Fidelity mutual funds are among the highest rated funds in the market.
    * Bond Funds: The bond funds are the ones in which the returns are derived from several different bonds such as municipal and governmental bonds.
    * Money Market Funds: Connoted to be the most secure of all the funds, the money market funds derive profit and returns from several different short term investments (which have a maturity period which is lesser than 13 months).
    * International Funds: Some specified funds by Fidelity are renounced for their international investments. Such funds are high yield mutual funds and tend to have a really good rate of return.
    * Retirement Fund: Some of the best Fidelity 401-k funds are popular among people planning their retirement. The best funds for 401-k also tend to have excellent, secured, tax free returns.

Best Fidelity Funds for 2011

The following are some of the top Fidelity mutual funds and the best long term investments, which you can consider.

    * Fidelity Low-Priced Stock Fund
    * Fidelity Select Healthcare
    * Fidelity’s Focused Stock Fund
    * Fidelity Contrafund
    * Fidelity Global Balanced
    * Fidelity Floating Rate High Income
    * Fidelity Dividend Growth
    * Fidelity Freedom (Series)
    * Fidelity CA Sh Intrm T/F Bd Fd
    * Fidelity GNMA Fund

For more inputs on good investments, you may also refer to:

    * Mutual Funds for Dummies
    * Investment Adviser
    * Best Investments for 2011

Though these are the best Fidelity mutual funds, it is essential to make a personal analysis of these funds before you actually invest. The best way to judge the top Fidelity funds for 2011 is to get a prospectus and study the investments and the returns over investments. I hope that elaboration on the best Fidelity funds for 2011 is resourceful. Good luck.

Best No Load Mutual Funds for 2011

Mutual funds are one of the finest investment options for people belonging to all income groups. There is a lot of flexibility offered in this form of investment and investors should take advantage of such great offerings to fulfill their financial goals in life. Though mutual funds can be the best investments for 2011, there are many things which must be kept in mind before making your actual investments. So, let is know of the basic concept of mutual funds before we know of what are the best no load mutual funds for 2011.

Basic Concept of Mutual Funds

Mutual funds would be the good investments for 2011 considering the fact that they offer great flexibility and choice for the investors. Depending on their risk profiles, investors can choose the funds of their choice for their best long term investments. They can either choose the more secure large cap funds of reputed mutual fund companies, or the mid cap or small cap funds if they have the ability to take more risks. Investing in the top performing mutual funds can be safer than direct stock investments if you are not aware of the fluctuations and overall working of the stock markets. Most mutual funds allow investors to invest right from very small amounts to large sums - depending on their convenience.

Mutual funds can be the best investments for young people having a long term horizon of investments. Understanding the role of fund mangers in the performance of a mutual fund is very important. Fund managers are trained and qualified finance professionals who invest the client money in stock and bonds after a careful and detail research. They manage portfolios and include and sell stocks depending on the performance of the companies and earning estimates. A well managed fund can only give handsome returns to its investors. So, before investing your money, you need to go through the names of high yield mutual funds or the mutual fund ratings to avoid a wrong choice of mutual fund. Taking help from an investment advisor or an industry expert while choosing a good mutual fund can surely prove to be helpful in gaining wealth in the long term. In the next section, we shall know about the best no load mutual funds for 2011.

No Load Mutual Funds

Loads are nothing but the costs incurred which are taken from the investors by the mutual fund companies. Some of the loads can be the management fees or charges, non-management expenses, brokerage commissions and investor fees. No load mutual funds have gained a lot of popularity in recent times and the no load mutual funds list can help you in choosing the right fund for yourself. Given below are some of the best no load mutual funds for 2011:

    * Fidelity Short-Term Bond Fund
    * Delafield Fund
    * Fidelity Low-Priced Stock Fund
    * Fairholme Fund
    * Old Westbury Fixed Income Fund

These were some of the best no load mutual funds for 2011. The advantage of choosing no load mutual funds over other mutual funds is that you get expert management for your investments without having to spend big money. The following Buzzle articles on mutual funds will help you know things easily:

    * Mutual Funds for Dummies
    * Mutual Funds Ratings

Hopefully, this article on best no load mutual funds for 2011 will assist you in your investment decisions to a great extent. So, take wise decisions and enjoy the process of wealth creation. Good luck!

Which Mutual Funds to Invest in 2011

People are becoming more and more interested in saving money for a better future and one of the best ways to save money is to invest in mutual funds. More and more people are showing an interest in investing in mutual funds but most of them don't know the basic concept and working of mutual fund companies. If you are someone who has saved a considerable amount of money or landed a new job, investing in the best mutual funds 2011 is a good idea. Let's understand which are the best mutual funds to invest in 2011.

Choosing the Right Mutual Fund to Invest

Choosing the right mutual fund ensures incoming wealth for a long time. However, choosing the best mutual fund out of the lot can be quite difficult. Your financial advisor will definitely tell you which are the best funds for your money but it's advisable that you also do some research before investing your hard earned money. Here are some tips to help you know which mutual funds to invest in 2011.

    * Choose the company with a good track record of investing in the mutual fund market. Always keep in mind that your money should always be in hands of experts who have had a long history of commitment and excellence in the fund market.
    * While you get a detailed check of the company's history also see what is the current status of the company. This means asset class, fund objective and its current investments in the financial market.
    * Make sure you find a fund manager which understands your needs and eagerness to learn about mutual funds. He/She should be well versed with the stock market and also know various tricks of the trade. It's important that your manager has skills.
    * Do not purchase mutual funds with loads. Loads are nothing but the additional management fee which gets deducted from your overall investment when you put your money in the fund. You can also find many better performing funds which do not carry loads and you don't have to pay the extra fee also.
    * In the world of big investments such as mutual funds sometimes the situation gets too huge. The problem begins when mutual fund companies find a large number of investors and they become less focused on the market. Do not invest in mutual funds that exceed more than $10 billion in assets. When a mutual fund company outdoes this number, there's no advantage of choosing this fund.
    * The most important part, is to read the OD (Offer Document) very carefully. It comes out when the scheme is launched and is updated as required.
    * Reading the KIM (Key Information Memorandum) is also very necessary before you invest in mutual funds. You can call the KIM a second cousin to the OD. This document contains most of the important details of the scheme. It also says that the fund invests its money in equity or debt. You also get the basic knowledge about all the risks and you also come to know about the various plans to avoid.

Top Mutual Funds to Invest in 2011

Now that you know how to invest in mutual funds. Here are some of the best mutual fund companies which offer you the maximum benefits.

    * Fidelity Contrafund
    * FPA Crescent
    * Oakmark International
    * T. Rowe Price Emerging Markets
    * Primecap Odyssey Growth
    * American Funds Capital Income Builder
    * Templeton Global Bond advantage
    * Dreyfus International Bond
    * Vanguard Wellington

Hope now you know which mutual funds to invest in 2011. Using a proper investment strategy while investing in mutual funds will give you profitable returns for a long time.

Mutual Funds to Watch in 2011

What is the merit of mutual funds, that a considerable number of people have started opting for it? The basic and the most important advantage of a mutual fund is, professional management, a feature that most of the other investments such as direct stock investments do not have. Mutual funds are manged by a team of experts who are headed by a fund manager. The following paragraph explains the concepts revolving around mutual funds and also lists out some of the best mutual funds for 2011 that are currently in operation and are expected to show a fascinating performance through out the year.

What are Mutual Funds?

A mutual fund is principally a collective investment scheme, that is it is a pool of funds invested by several investors. The invested portion of the fund is known as a 'share' and periodic return or reward of the fund is simple referred to as a 'return'. Fund managers usually invest the pools and funds into, reliable and underwritten sources which offer really good returns. The profits and returns which are earned by the mutual fund are then distributed among its share owners or investors. This is the principle working of the common mutual funds.

Now, there are some differences in different mutual funds such as the rate of returns that are offered by the company, or the structure of investments and repayment of returns. In some cases, the returns of the mutual fund are based upon specified factors such as an index developed by the mutual fund company or indexes of stock exchanges. Alternatively, it might also depend upon different values such as cash values and the net asset value of the fund. All these features are collectively, referred to as the portfolio of the fund. A portfolio may be singular, that is, it may depict your investments only, or it can also be of the entire pool of funds that been used as a collective investment scheme.

Features of a Mutual Fund that Make it a Good One

The next question that is bound to pop up in our minds is, what are the features which make a mutual fund a good one. Here are some leads:

    * The first feature that should be take into consideration is the company and the fund manager who would be managing the fund. The better the reputation the better is the fund. A professional management means that incidences of risky investment would be drastically curbed down.
    * The second point that can be taken into consideration is the fund's portfolio, that is the places and destinations in which the mutual fund is going to be invested into. These destinations include stock exchanges, bonds, money markets, preferential capital, etc. The sectors such as banking, automobile, steel, crude oil and others also substantially influence the returns of the fund. The portfolio should be aggressive but safe.
    * The third most crucial point that needs to be considered is the mutual fund's investment and returns structure. Basically the company providing the mutual fund would give you the structure and also a projection. The returns of the mutual funds are usually made up of two parts, namely, the assured or guaranteed returns and the ones that cannot be guaranteed in some cases, some funds do not have guaranteed returns. Calculate the rate of returns and judge whether the mutual fund sounds to be a suitable investment. Note calculate the return over investment in percentage (%) as it gives a better point of comparison.

Mutual Funds to Watch in 2011

The following is a list of some of the really good mutual funds which have very promising features, great return over investments, excellent projections.

    * Vanguard Wellington
    * Fidelity Contrafund
    * Dreyfus International Bond
    * Fidelity Select Materials
    * Janus Overseas T Fund
    * Primecap Odyssey Growth
    * FPA Crescent
    * American Funds Mutual Fund
    * Vanguard Windsor II Fund
    * Jensen Portfolio
    * AMCAP Fund

Apart from these high performing funds, you may also explore other types of funds on the basis of the aforementioned points. All the needed details are usually disclosed by investment company. I hope that the elaboration on mutual funds to watch in 2011 is resourceful.

Are Mutual Funds Safe?

Mutual fund investments are recommended by several investment analysts for building a solid investment portfolio. Though mutual funds originated long back, they are still the most preferred forms of investments due to many reasons. However, as we know, there are some risks associated with every investment, and it is taken for granted that the investor is completely aware of them before investing. The same holds true for the mutual fund investments also. While signing up with any mutual fund company, you are given a document which has disclaimer clauses and a statement like-"Mutual fund investments are subject to market risks. So, please read the prospectus carefully before investing". At this point, a common investor gets confused as of where his money would be safe. However, my point is that one should choose an option which is less risky as compared to the other options.

Types of Mutual Funds

In a mutual fund, we invest money on a monthly basis in our selected scheme. The following are the kinds of funds which we get to select from:

    * Large cap funds
    * Mid cap funds
    * Small cap funds
    * Diversified funds
    * Sector specific funds

However, in spite of the variety available, the question are mutual funds safer than stocks arises, because mutual fund companies will ultimately be investing the money into select stocks which they decide after a good research. Many people fear that in times of stock market crash, their mutual fund asset value too will go down. Though this is true, you also tend to gain when the market rises and this can help you recover from past losses. Funds are invested by fund managers who are responsible for professionally managing mutual funds. As they say, knowledge is the king in the stock markets and hence profound knowledge of capital markets can be a way of wealth creation.

When a retail investor buys stocks, he might not be aware of the risks associated with it, as he is not in touch with the happenings in the markets on a daily basis. However, finance professionals who manage mutual funds have industry knowledge and exposure which helps them to make right 'buy' and 'sell' calls to protect and increase investor wealth. Thus, the answer to the question are mutual funds safe is a YES in most cases.

Exchange traded funds (ETF's) are nothing but mutual funds that are traded on the stock exchange. ETF's have also emerged as good investment options over the years. However, if you wish to know whether mutual funds are safer than ETF's, then considering the track record of the mutual fund company, its history of returns and ability of fund managers is important. Though most funds are well managed, some poorly managed funds do exist in the market, and they can deteriorate your wealth. So, you should track the performance of a fund for the past few years and go for the one which shows maximum consistency and pays good dividends. Another point, which I would like to discuss at this point, is that you need to buy mutual funds with a long term investment outlook. If you close your fund earlier, then you might not get the desired returns.

Top Mutual Funds

After knowing that mutual funds are relatively safe, you might be wondering which mutual funds to invest in 2011. So, here is a list of top rated mutual funds for 2011:

    * Primecap Odyssey Growth
    * T. Rowe Price Emerging Markets
    * FPA Crescent
    * Fidelity Contrafund
    * Oakmark International
    * Vanguard Wellington

So we can conclude that mutual funds are the relatively safer option in terms of financial investments. One must definitely consider this form of investment after a careful research. A mutual fund scheme of fifteen to twenty years would be the ideal for youngsters who have just started earning. So, hoping that you will use the above information well, I would like to sign off here. Good luck!

Mutual Funds Explained

Mutual fund companies, as we all know, invest our money into stocks and bonds and manage our wealth to generate superior returns. The management of mutual funds is done by fund managers of that company. Fund managers are finance professionals with ample experience in the functions of portfolio management, risk management and wealth management. Investment in these funds is simpler, and returns are assured in most cases.

While selecting mutual funds for dummies, one should look at the past fund management history of the firm. There are some funds which have performed well consistently, even in poor market conditions while some other funds fail to deliver expected returns. Naturally, one would like to go with the former to safeguard his/her financial future. Mutual funds do come at a price, as you have to pay fees for signing up and management fees to the company. So, before you buy one, make sure that the charges you are paying are not astronomical, and are as per the set standards. As an intelligent investor, you should read the offer document completely and get all your doubts answered. Though there are many mutual funds to invest in this year, you should choose the one which suits your style of investing and your risk taking ability.

Mid Cap and Small Cap Mutual Funds
Understanding the different types of mutual funds is essential to pick the right one. Mid cap and small cap funds do come with a risk, however, the chances of getting more returns, as compared to large cap funds are more. So, with a high risk taking ability, you can try this option.

Large Cap Funds
Large cap funds will basically invest in stocks of blue chip companies which are much more stable, as compared to mid cap and small cap stocks. The chances of loosing money here would be very less. The returns can be modest at times, however, long term investors need not worry as the outlook for the next few years remains positive, as per the view of several investment analysts.

Growth Funds
Growth funds are those mutual funds which look for fast growing companies in the market. These companies can be from the mid cap space too. A growth fund can have stocks of diverse sectors so that investors get the maximum advantage of a turn around or transformation happening in a company.

Value Funds
Value funds are those mutual funds which look out for companies which have strong fundamentals, and yet have not been popular investment bets. The chances of getting appreciation in terms of stock price are more in such stocks when they come into focus. For investors in value funds, returns may come slowly, but the gains would be substantial in four to seven years time span.

Diversified Funds
Diversified funds are the best mutual funds for 2011. These funds include investments in different companies belonging to various sectors. The investments are done in a planed manner to help investors reap the maximum benefits. This type of funds have been the most profitable in market crashes.

Understanding mutual funds must have become easier with the above explanation. However, the concept of mutual funds explained alone would not be sufficient for investor gains You should be aware of which are the hottest mutual funds in today's market. Here is a list of some of the top mutual funds:

    * Fidelity Contrafund
    * Templeton Global Bond Adv
    * American Funds - Capital Income Builder
    * Vanguard STAR
    * T. Rowe Price Spectrum Growth

Mutual funds explained above will definitely help you to take the right investment decision. Also consult a knowledgeable person to prepare a good investment portfolio for good gains. All the best!