Fund Fundamentals
This process involves gathering money from thousands of individual investors to buy a large portfolio of assets, reducing individual risk through diversification.
Money pooling
This term describes a sales commission paid upfront at the exact moment you purchase mutual fund shares.
What is a Front-End Load?
Rather than trying to beat the market, these passive funds automatically duplicate the performance of a specific benchmark like the S&P 500.
What are Index Funds?
What is the currency of Japan?
yen
This common type of mutual fund continuously creates new shares when investors buy and redeems shares when they sell.
open end fund
These funds charge zero sales commission, meaning 100% of your money goes directly toward buying assets.
What are No-Load Funds?
High trading frequency by active managers creates portfolio turnover, which triggers these distributions that increase an investor's annual tax bill.
What are taxable capital gains distributions?
Which city was the first capital of the United States?
NYC
Calculated at the end of each trading day, this figure represents the exact value of a single share of a mutual fund.
NAV
Named after a specific rule, these operational fees are deducted from the fund to pay for marketing, advertising, and distribution to brokers.
What are 12b-1 fees?
This ultra-safe fund type invests in short-term government and corporate debt like T-bills and CDs, but offers low returns that are unsuitable for 45-year retirement horizons.
What is a Money Market Fund?
What item did Alfred Nobel, the founder of the Nobel Prize, invent?
Dynamite
A fund holds $10,000,000 in market value and $790,000 in liabilities across 1,200,000 shares. To the nearest cent, this is its NAV.
What is $7.68?
If an investor wants a share class with no front-end or back-end loads, but accepts higher ongoing 12b-1 fees, they should buy this share class.
What is Class C?
Bozena earns $32,000 and contributes 5% ($1,600) to her 401(k). With her company’s 50% match, this total amount enters her account each year.
What is $2,400?
Which was the first video to reach 1 billion views on YouTube?
Gangnam Style
Instead of focusing on capital growth, this specific portfolio type invests primarily in dividend-paying stocks or high-yield bonds to generate regular cash payouts.
What is an Income Fund?
This ongoing fee compensates professional managers to select and monitor investments and typically ranges from 0.5% to 1.0% annually.
What is a Management Fee?
If a mutual fund has a Beta score greater than 1.0, it means the fund fluctuates more than this standard benchmark.
the market
What is the Spanish term for a small shared dish or snack?
tapas