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Mutual Funds

A mutual fund is a pool of investments managed by an investment firm using a variety of instruments such as stocks, bonds, or government securities. When one purchases shares of a mutual fund, the investment firm (not the individual investor) is responsible for the day-to-day investment activity of the securities within that fund.

There are a variety of different types of mutual funds available today, ranging from balanced funds, bond funds, blue chips, small caps, foreign funds, and more. Each mutual fund is very different in its make-up and philosophy, for instance some funds own hundreds of different securities, while others may own only a few dozen. Mutual fund companies do not guarantee returns and investors need to be aware that there is the potential for negative portfolio or market performance that can lead to the loss of money in mutual fund investments. An investor should look for funds with objectives and risk levels that match those of his/her financial strategy.

Some of the main benefits of investing in mutual funds include:

  • Instant Diversification. Many have heard the phrase, “don't put all of your eggs in one basket.” In a mutual fund, investor monies are spread across a variety of different securities investments. By investing in mutual funds, as opposed to individual securities, the account growth or loss is based upon a group of different investments, rather than the performance of a single security.
  • Professional management. By investing in mutual funds, the investor is not involved in the evaluation and maintenance of the underlying portfolio investments. Instead, the day-to-day decisions of each fund are handled by experienced, professional money managers.
  • Lower fees and expenses. Mutual funds provide economies of scale. Because mutual funds pool the resources of many investors, the fees per share passed on to each individual investor from purchasing the underlying securities in a mutual fund are often less than if they would purchase the same individual securities on their own.
  • Convenience. Dividends and capital gains can be used to purchase additional shares, facilitating growth to an investor's portfolio.
  • Automatic Investment Planning. Commonly, investors are able to set up a dollar cost averaging plan with their bank or brokerage account to invest a set amount each month into the mutual fund of their choice.

TFA has relationships with many of the top mutual fund providers in the country. Contact this Transamerica Financial Advisors, Inc. (TFA) professional to learn more about mutual funds and to discuss whether a mutual fund investment is right for you.

Investment Risk Disclaimer

There are risks, fees and charges, and limitation that one must consider when investing.

Securities products are sold by prospectus which contains more complete information about charges, risks, objectives and expenses. Copies of specific product prospectuses and statements of additional information may be obtained by contacting your registered representative. Prospectuses should be read carefully and the charges, risks, objectives and expenses should be carefully considered before investing or sending money.

Securities are offered through Transamerica Financial Advisors, Inc. (TFA or Transamerica Financial Advisors), Member FINRA/SIPC (