Chapter 12 - Mutual Fund

1. Attractions Mutual Fund

1.1. invest small amount

1.2. Professional Management

2. Drawbacks Mutual Fund

2.1. Substantial Transaction Cost

2.2. Lower-than-Market Performance

3. Six types of Management Companies

3.1. Open-End Investment Companies

3.2. Closed-End Investment Companies

3.3. Exchange-Traded Fund (ETF)

3.4. Unit Investment Trusts (UIT)

3.5. Real Estate Investment Trusts (REIT)

3.6. Hedge Funds

4. 13 Types of Mutual Funds

4.1. Growth Fund

4.2. Aggressive Growth Fund

4.3. Value Fund

4.4. Equity-income Fund

4.5. Balanced Fund

4.6. Growth-and-Income Fund

4.7. Bond Funds

4.7.1. 8 types of Bond Funds

4.7.1.1. Government bond funds

4.7.1.2. Mortgage-backed bond funds

4.7.1.3. High-grade corporate bond funds

4.7.1.4. High-yield corporate bond funds

4.7.1.5. Convertible bond funds

4.7.1.6. Municipal bond funds

4.7.1.7. Intermediate-term bond funds

4.7.1.8. Short-term bond funds

4.8. Money Markets Funds

4.9. Index Funds

4.10. Sector Funds

4.11. Socially Responsible Funds

4.12. Asset Allocation Funds

4.13. International Funds

5. Mutual Fund Investor Service

5.1. Automatic Investment Plans

5.2. Automatic Reinvestment of Interest

5.3. Systematic Withdraw Plans

5.4. Conversion ( Exchange ) Privileges

5.5. Phone Switching

5.6. Easy Establishment of Retirement Plans

6. Comparing Closed-End and Open-End Funds

6.1. Premium ( or discount ) = ( Share Price -NAV ) / NAV

7. Calculating Return : Holding Period Return ( HPR )

7.1. [( Number of shares at end of period X Ending Price ) - ( Number of shares at beginning of period X Initial Price ) ] / ( Number of shares at beginning of period X Initial Price )