1. What is a Mutual Fund?
 Brings groups of investors together
 Actually buying shares of the fund
 Number of shares depend upon
investors
 Net Asset Value (NAV) issues
Data Source: Morningstar Investing Classroom

2. Mutual Fund Benefits
 Easy to buy and sell
 Financial Advisors
 Directly through fund family
 Fund Supermarkets (e.g. 401k)
 Regulated and Professionally
managed
Data Source: Morningstar Investing Classroom

3. Quick Quiz

Investing in a stock mutual fund does
NOT offer you
A.
B.
C.

Indirect ownership of a group of
companies
Regulation by the SEC
An insured investment
Answer is “C”
Data Source: Morningstar Investing Classroom

4. Quick Quiz

A fund’s price per share is called its:
A.
B.
C.

Stock price
Net Asset Value (NAV)
Initial Investment
Answer is “B”
Data Source: Morningstar Investing Classroom

5. Quick Quiz

Who owns Fidelity Magellan Fund?
A.
B.
C.

Fidelity
Fidelity Magellan’s Board of
Directors
Fidelity Magellan’s shareholders
Answer is “C”
Data Source: Morningstar Investing Classroom

6. Quick Quiz

Which of the following statements is false?
A.
B.
C.

When you own a fund, you own all the
securities in that fund; when you sell the fund,
the fund transfers ownership of those
securities to you
When you own a fund, you pay a manager to
choose securities for you
You can sell a closed fund, but you cannot buy
one
Answer is “A”
Data Source: Morningstar Investing Classroom

7. Quick Quiz

All mutual funds registered through the
Investment Act of 1940 increase the
number of shares by IPO’s, secondary
offerings, and share repurchases.
A.
B.

True
False
Answer is “B”
Data Source: Morningstar Investing Classroom

8. Coming Next:


Mutual fund fees and taxes
Down the road:



Mutual funds vs. I-shares
Best mutual funds of 2002
…and much, much more!
Data Source: Morningstar Investing Classroom