12 Mutual Funds Flashcards
1
Q
MFs
A
- Diversification at low cost and across funds
2
Q
Shares in MFs
A
Multiple share classes:
- A shares, usually a front load (sales commission)
- B shares, usually a 12b-1 or distribution fee (sales com)
- Others characterized by differences in fee structure
3
Q
Choosing a MF (passive)
A
LOWEST FEES!
4
Q
Choosing a MF (active)
A
No LOAD
No 12b-1 fees
Risk level/beta
Category/style
Turnover ratio
R²
Manager tenure
Specialty: sector or industry
LOWEST FEES
5
Q
MF & tax
A
A fund pays no income tax if it passes 95% of its income to investors (dividends)
