History
What year was the first mutual fund created in the U.S.?
→ 1924 – The Massachusetts Investors Trust was the first mutual fund.
What type of mutual fund invests mainly in stocks?
Equity mutual fund.
What is a common fee charged annually by mutual funds for managing your investment?
Expense ratio
Do investors pay taxes on gains from mutual funds?
Yes – on capital gains and dividends.
Which famous investor once said, “Mutual funds make investing easy”?
Warren Buffett
What major financial event in the 20th century increased interest in mutual funds?
The Great Depression – people wanted safer, diversified investments.
Which type of mutual fund is known for lower risk and invests in government or corporate bonds?
Bond mutual fund.
What type of fee might be charged when you buy or sell shares of a mutual fund?
Load fee (front-end or back-end load).
Are mutual funds considered liquid or illiquid?
Liquid – you can redeem them fairly easily.
Roughly how many mutual funds are there in the U.S.?
Over 7,000!
What financial innovation in the 1970s made mutual funds popular among everyday investors?
The invention of money market mutual funds.
What type of fund tries to mimic a market index like the S&P 500?
Index fund
Can you trade mutual funds during the day like stocks?
No – mutual funds are only traded at the end of the trading day.
How can mutual fund investors reduce their tax bill?
By investing through a tax-advantaged account like a Roth IRA.
What’s the difference between a mutual fund and an ETF?
ETFs trade like stocks during the day, mutual funds don’t.